The City of Hyderabad served as the capital of Sindh province between 1947 and 1955. The Partition of India resulted in the large-scale exodus of much of the city's Hindu population, though like much of Sindh, Hyderabad did not experience the widespread rioting that occurred in Punjab and Bengal.^[19] In all, less than 500 Hindu were killed in Sindh between 1947-48 as Sindhi Muslims largely resisted calls to turn against their Hindu neighbours.^[20] Hindus did not flee Hyderabad en masse until riots erupted in Karachi on 6 January 1948, which sowed fear in Sindhi Hindus despite the fact that the riots were local and regarded Sikh refugees from Punjab seeking refuge in Karachi.^[19]

The Hindus who departed had played a major role in the city's economy, and formed the majority of the Hyderabad's population.^[14] The vacuum left by the departure of much of the city's Hindu population was quickly filled by newly arrived refugees from India, known as Muhajirs.^[21] By 1951, 66% of the city was made up of Muhajirs.^[22] Though Hyderabad became a majority Urdu-speaking city in the 1940s, the arrival of Pashtuns and Punjabis from northern Pakistan further diversified the city's ethnic composition over the next few decades.^[21]

Animosity between Urdu and Sindhi speakers first arose in 1967,^[9] it intensified under the Pakistan People's Party government in the 1970s, which were widely perceived by Muhajirs to be a pro-Sindhi administration.^[23] Violence erupted between Urdu and Sindhi speakers during riots in 1971 when the provincial government wished to impose Sindhi-language requirements on Urdu speakers, and again in 1972 in reaction to the 1972 Sindhi Language Bill.^[23]

The Khuda Ki Basti housing scheme was launched in Hyderabad 1981 as a way to provide housing to low-income residents by forming local cooperatives pool funds to gradually provide increased services that would in turn be managed by community members.^[24] Success of the project resulted in the programme being launched in Karachi as well.

The late 1980s saw turbulent ethnic rioting between Sindhis and Muhajirs.^[25] On 30 September 1988, militants from the Sindh Progressive Party drove into Muhajir dominated areas in the city, and opened indiscriminate fire in busy crossroads.^[23] The so-called "Hyderabad Massacre" resulted in the deaths of over 60 people in a single day, and more than 250 deaths in total. In a backlash, more than 60 Sindhi speaking people were gunned down in Karachi.^[25][26] The city began to divide itself ethnically, and the Muhajir population migrated en masse from Qasimabad and the interior of Sindh into Latifabad. Similarly, Sindhis moved to Qasimabad from Hyderabad and Latifabad.^[25][27][28] Further ethnic disturbances occurred in May 1990, including a police-led siege of the Pacco Qillo fortress in the center of Hyderabad,^[23] in which Muhajir activists claim 150 were killed.^[29] 2 bombings on trains in Hyderabad killed 10 people in 2000.^[30]

Much of Hyderabad's public spaces have been encroached upon by illegally-constructed homes and businesses.^[9] Much of the city's historic structures are badly neglected,^[9] with little preservation being undertaken by the provincial administration.