Gurdaspur was founded by Guriya Ji in the beginning of 17th century. On his name, this city was named as Gurdaspur. He bought land for Gurdaspur from Jats of SangiGotra. It is also established that some people used to live in huts in the old city. Guriya Ji a Sanwal Brahmin of KaushalGotra belonged to a village Paniar situated 5 miles north of Gurdaspur. The ancestors of Guriya Ji came from Ayodhaya long time ago and settled in Paniar. Guriya Ji had two sons Sh.NawalRai and Sh.Pala Ji. The descendants of NawalRai settled in GurdaspurNawalRai’s son Baba Deep Chand was a contemporary of Guru Gobind Singh Ji. It is believed that Guru Gobind Singh Ji gave the title of GanjBakhsh (Owner Of Treasure) to Baba Deep Chand. The descendants of Baba Deep Chand are known as Mahants.
In the decline and fall of the Mughal supermacy and the rise of the Sikh power this district saw, its most stiring scenes. Some of the sikh Gurus have been closely associated with the district. Guru Nanak, born in 1469 in the Lahore district, married in 1485 with Sulkhani, daughter of Mool Chand, a Khatri of Pakhoke (Dera Baba Nanak) in the Batala Tehsil. There is still a wall known as Jhoolana Mahal which swings in Gurdaspur.Rahila. Banda Bahadur, the disciple of Guru Gobind Singh used this district as a base to raid the country upto Lahore, the emperor Bahadur Shah conducted an expedition against him in 1711 but with only temporary effect. Banda Bahadar fought his last battle with the Mughal at GurdasNangal in the district and was captured. The history of the district then degenerates into an account of their restruggles of the rival Ramgarhia and KanhayaMisals for supermacy in this part of the Doab, the power of the former was broken in 1808 and of the latter in 1811 by Maharaja Ranjit Singh, who thus assumed way over the whole district.