The official estimate of Bhutan's population in 1990 was about 600,000 but other sources estimate the population for 2000 was just under 2 million. Those living in Bhutan of Nepali origin have been excluded from the official census since 1990 which results in such a large discrepancy in population numbers.

Bhutan has four major ethic groups: Bhutia, Sharchops, Nepali, and other indigenous groups. The Bhutia, who are descended from Tibetans, live in the central and northern regions of Bhutan. This ethnic group basically dominates politics in Bhutan particularly with it's contribution of government officials and monks that come from it.

Believed to be Bhutan's earliest settlers, the Sharchops live in the southeastern and eastern region. They speak both Tibeto-Burman languages as well as Hindi.

The Nepali people are the latest immigrants to Bhutan. Living in the southwestern and south central section of Bhutan, immigration of Nepali's has been forbidden by the Bhutanese government since 1959. Fear of Bhutan becoming too heavily populated with Nepalis brought about this and the ban on living in the central Himalayan region. Bhutan traditions and culture are to be retained and not dilute Bhutanese distinctiveness.

There are small groups of ethnic minorities that live all throughout Bhutan with the largest group living in the Duars. This group is related to those groups living in India's Assam and Bangla states.