Manali is situated at the northen end of the Kullu Valley, Manali has spectacular views of snowcapped peaks and wooded slopes. The Beas rushes along its rocky course amid grassy meadows carpeted with wild flowers and wagtails hop along from stone to stone along the stream's edge.

The Manali market is crowded with myriads of interesting shops selling Tibetan carpets and crafts and the appetizing aroma of steaming noodles hangs about the little restaurants.

In ancient times, the valley was sparsely populated by nomadic hunters known as "rakshas". The next arrivals were the shepherds who arrived from the Kangra valley and settled to take up agriculture. Some of the earliest inhabitants of the region are the 'naur' or 'nar' which is a caste unique to the Kullu valley. Only a few naur families are known to exist now. A naur family in the village Soyal near Haripur on the west bank of Manali was famous for the vast land they owned and their practice of having 'rakshas' as their labourers.

The British were responsible for introducing apples and trout which were not native to Manali. It is said that when apple trees were first planted the fruits were so plentiful that often branches, unable to bear the weight would collapse. To this day apple along with plum and pear remains the best source of income for the majority of its inhabitants.

Tourism in Manali received a real boost after the rise of militancy in Kashmir in the late 1980s. This once quiet village was transformed into a bustling town with hundreds of hotels and restaurants.