It is situated on the Jodhpur-Jaisalmer railway line. It is the second-largest town in the district and is also the sub-divisional headquarters. The town is situated at distance of from Jodhpur. The present population of the town, as per census 2001, is 44,756. Several Government and semi-government offices are situated in the town. Phalodi is surrounded by Bikaner, Nagaur and Jaisalmer Districts. It is well-connected via road and railway. The railway station of the town was established in 1914. National Highway 15 (Pathankot-Kandla) and State Highway No. 2 (Jodhpur- Jaisalmer) pass through the town.