Most Punjabis trace their ancestry to pre-Islamic Jat and Rajput castes. However, as they intermarried with other ethnic groups who came to the area, certain qaums (clan or tribal groups) came to predominate, especially Gujjars, Awans, Arains, and Khokkars in northern Punjab, and Gilanis, Gardezis, Qureshis, and Abbasis in the south. Other Punjabis trace their heritage to Arabia, Persia, Balochistan, Afghanistan, and Kashmir. Thus, in contrast with many other areas, where people often remained isolated, Punjabis had very diverse origins. The extent of this diversity facilitated their coalescence into a coherent ethnic community that has historically placed great emphasis both on farming and on fighting.

In censuses taken in British India, Punjabis were typically divided into "functional castes" or "agricultural tribes." The word caste, however, is grounded in the Hindu notions of reincarnation and karma; Muslims totally reject these religious connotations and use the term qaum instead. Tribal affiliation, based on descent and occupational specialization, tends to merge in Punjab into a qaum identity. An occupational group typically claims descent from a single ancestor, and many tribes traditionally followed a single occupation. The traditional occupation gives the group its name as well as its general position in the social hierarchy.

An important aspect of Punjabi ethnicity is reciprocity at the village level. A man's brother is his friend, his friend is his brother, and both enjoy equal access to his resources. Traditionally, a person has virtually free access to a kinsman's resources without foreseeable payback. This situation results in social networks founded on local (kinship-based) group needs as opposed to individual wants. These networks in turn perpetuate not only friendly relations but also the structure of the community itself. There is great social pressure on an individual to share and pool such resources as income, political influence, and personal connections. Kinship obligations continue to be central to a Punjabi's identity and concerns. Distinctions based on qaum remain significant social markers, particularly in rural areas.

Punjabis predominate in the upper echelons of the military and civil service and in large part run the central government. This situation is resented by many Pakhtuns, Baloch, and, particularly by Sindhis, whose numbers and wealth are comparatively small and who are proportionately underrepresented in public positions. Particularly galling to Sindhis is the fact that the muhajirs, who live mainly in their province, are the only overrepresented group in public positions, which is generally traceable to better education in India prior to migrating in 1947. In the early 1980s, tensions mounted between Punjabis and Sindhis because the latter group was feeling alienated from the state. The capital had been moved from Karachi (in Sindh) to Islamabad (in northern Punjab) and Zulfiqar Ali Bhutto (from Sindh) was not only ousted but hanged. Of the three most prominent national politicians in the 1980s and early 1990s, two were Punjabis: President Zia ul-Haq and Prime Minister Mian Nawaz Sharif. Only Benazir Bhutto, Pakistan People's Party leader and prime minister from October 1993, is Sindhi.