The city was established by Moghul Emperor Akbar, King Jahangir in his memos records the following information on Gujrat:
"At the time when His Majesty Akbar went to Kashmir, a fort had been built on the bank of that river. Having brought to this fort a body of Gujars who had passed their time in the neighbourhood in thieving and highway robbery, he established them here. As it had become the abode of Gujars, he made it a separate pargana, and gave it the name of Gujrat."
According to the 1998 census of Pakistan the total population of Gujrat district was 2,048,008 of which 1,026,000 are males and 1,022,000 are females, with a population density of 642 persons per square kilometre. Over 25.62% of the population was recorded as being urban.