A tiny town founded only to act as an agricultural market/mandi has now grown into a giant size metropolitan city, which enjoys third position in the country, as far as population and industrial growth is concerned. The present Faisalabad district came into existence in 1904 as Lyallpur district. Earlier, it was a Tehsil of Jhang district. During the later part of the 19th century, the Government of India initiated a great system of artificial irrigation through construction of canals.

The area of Faisalabad district was part of three districts via Gujranwala, Jhang and Sahiwal. This area was located between river Ravi and River Chenab and formed part of Rachna Doab. The name Lyallpur was given with a view to pay tribute to Sir James Lyall, Lt. Governor of Punjab, for his services rendered in colonization of the lower Chenab valley.

The design of the town was prepared by Captain Pophan Young C.I.E, a colonization officer. In 1896, Lyallpur tehsil comprised of Gujranwala, Jhang and Sahiwal and was under the administrative control of district Jhang.