Bahawalnagar originally known as Rojhanwali was a small settlement consisting of few huts and shacks. This village Rojhanwali is still in existence at a distance of about 1.5 miles north of the Railway Station. In the year 1895, a railway station was established and was named as Rojhanwali Railway Station. It was a junction between Bahawalnagar and Bhatinda at distance of 113 miles, now linking branch lines Amrooka and Fort Abbas. Before partition it was very busy junction. Trains used to run from Karachi to Delhi and vice versa via Bahawalnagar. Passenger trains also used to run from Bahawalnagar to Fazilka, Ferozpur. There was a loco shed and two institutes meant for recreation.
In 1904 when Nawab Mohammad Bahawal Khan Abbasi IV, who originally ruled over Bahawalpur State visited Rojhanwali the people asked that with His permission they want to rename the city on the name of Nawab,The Nawab allowed them with pleasure and since then the city is named as Bahawalnagar. With the advent of railways, 40–50 shops with a population of 100 dwelling units developed at existing railway bazar. Though this site was not fit for flourishing as the topographical features were not favorable and drinking water was unfit for health. With the introduction of canal system, it has become fertile area. The real achievement was Fordwah Canal which brought almost the entire district under the command of irrigation system. The town developed as colony town south of railway station.
In the year 1900–1901, first police station post was established and in 1902–1903 the first primary school was established. In the year 1906 a panchayat committee consisting of nominated members was composed. 1914 Bahawalnagar was recommended as Tehsil and the police post Jweka was shifted to Bahawalnagar. A regular municipal committee was constituted in year 1922 along with many members. The Assistant Commissioner and Tehsildar were then appointed as Mir Majlis and Naib Mir Majlis.
Bahawalnagar was formerly part of Bahawalpur and was set up as new district in January, 1953. After that, city got some importance and started some development.
Bahawalnagar have very old buildings and places.