Derawar fort was built in the 9th century AD by Rai Jajja bhati, a Hindu Rajput ruler of the Bhati clan, as a tribute to emperor Rawal Deoraj Bhati. The fort was initially known as Dera Rawal, and later referred to as Dera Rawar, which with the passage of time came to be pronounced Derawar, its present name.

In the 18th century, the fort was taken over by Muslim Nawabs of Bahawalpur from the Shahotra tribe. It was later renovated in its current form in 1732 by the Abbasi ruler Nawab Sadeq Muhammad, but in 1747 the fort slipped from their hands owing to Bahawal Khan's preoccupations at Shikarpur. Nawab Mubarak Khan took the stronghold back in 1804. 1,000 year-old catapult shells were found in the debris near a decaying wall in the fort.

Nawab Sadeq Muhammad Khan Abbasi V, the 12th and last ruler of Bahawalpur state, was born in the fort in 1904.
The fort is a massive and visually stunning square structure built of clay bricks. The walls have a length of 1500 meters and stand up to thirty meters high. There are forty circular bastions, ten on each side, which stand 30 m high and are visible across the desert for many miles.

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