Karauli  was discovered in 1348 AD by  King  Arjun Dev Pal. then karauli was called kalyanpuri . Legend has it that the ruling family were descendants of Lord Krishna, one of the most loved god of Hindu mythology. As such they occupy the topmost rank among the Yaduvanshi Rajputs and their family history is rich with tales of valour and glory.

the old traditional  Karauli city  is surrounded by red-stone made high walls.The peripheral wall, now dilapidated at several places, has six gates and eleven posterns. As per the legends, the ruling family of Karauli, recognised as the head of the Yadhuvanshi Rajputs, are the descendants of Lord Krishna. Situated 23 kms. from Kaila Devi, Karauli was an erstwhile princely state in eastern Rajasthan. Karauli is famous for its pale red-stone. Karauli has some noted places of visit like temples of Kaila Devi and Madan Mohanji and other historic monuments. The annual fair at the Kaila Devi temple is quite popular

in may 1949 the karauli is included in Matasya Sangh state 

Today Karauli, famous for its pale red sandstone, is also known as a holy place. There are some old monuments you could see here, apart from exploring the rambling countryside and the game sanctuary. There are excellent opportunities for jeep safaris and boating too. Do make it a point to visit the local bazaar where you get good handicraft items, especially the colourful bangles of Karauli. A major socio-religious event here is the Kaila Devi fair. Kaila Devi is an important deity of Karauli with a temple dedicated to her. A big cattle fair is also held in the month of February-March(before the holi festival) where camels, horses and buffaloes go on sale.