Social class in Sri Lanka is often described as casteless, though caste is still found on the island in both a symbolic and a practical sense. Caste is also used in an analogous sense to refer to the new social class divisions that have appeared in recent decades. The combination of ethnic nationalist movements that saw caste as an island-wide dividing tool, strong emphasis on providing access to education and healthcare regardless of background, and historic lack of discrimination among the colonial civil service played a factor in eradicating the caste system in most sectors of the island's society. Although the Buddhist culture actively fought against all forms of class discrimination, many Buddhist organizations used caste as a method to extract surplus from temple property.

Buddhism rejects casteism as a fundamental principle of its worldview, and this has an effect on reducing the severity of the caste system on the island. Notably, the highest caste group in both communities of the island also formed the popular majority for both communities.

The caste systems in Sri Lanka were organized in a similar manner to the Jāti systems found in South India. The history of the caste system in Sri Lanka is unclear since there is very little historical evidence and much research carried out into the subject has been criticized as being biased. Caste positions did not correlate with wealth.

Goyigama was the most common caste in the Sinhalese community numbering around 50%. These people were basically landowning farmers but had monopolized the high positions in politics and royal courts. Vellala is the term used for the similar community among Tamils. Brahmins did not have as much influence on the island as on the mainland, and the most politically influential caste belongs to the farmers.

The documented history of the island begins with the arrival of Prince Vijaya from India. The island was reportedly inhabited by four tribes at that time: the Dewa, Nagas, Yakkas and Raksha. Although the origin of Sri Lankan communities is unclear, genetic studies on Sinhalese have shown that most of the Sinhala community is genetically related to the South Indians and Bengalis. About half of the Sinhalese population are Govigama. Of the three native tribes, it is believed that the Dewa are part of the Sinhalese castes.

Ancient Sri Lankan texts, such as the Pujavaliya, Sadharmaratnavaliya, Yogaratnakaraya and inscriptions, show that a fourfold caste category namely Raja, Bamunu, Velanda and Govi existed among the Sinhalese. Evidence of this hierarchy can be seen during the 18th century British-Kandyan period, indicating its continuation even after the Sri Lankan monarchy. Colonialism and foreign intervention in the dynastic conflicts of the island throughout history has also influenced the caste system, some suggesting even a re-arrangement of the occupational castes. At present 13 castes are commonly found among the Sinhala viz. Radala, Govigama, Bathgama, Deva, Nekathi, Bodhivansha, Rajaka, kumbal, Hunu, Durava, Karava, Salagama and Navandanna, with smaller castes being absorbed to the larger castes.

In the Central Highlands, many traditions of the Kingdom of Kandy were preserved from its 1818 collapse beyond independence in 1948 and the Land Reform Act of the 1970s. Most Govigama were however ordinary farmers and tenants as absolute land ownership was exclusive to the king until the British colonial period. In addition to the Govigama, there were several strata of occupational castes. Wahumpura or Deva were the caste who traditionally made jaggery and farmed. The Bathgama caste was also engaged in agriculture with access to some land. The Navandanna (Achari) caste were artisans. The Rada were washers, and this caste is still prevalent in Sri Lanka's laundry sector. The Berava were traditional drummers and agricultural wage labourers. The Kinnara caste did menial work and were segregated from the rest of the community. The most important feature of the Kandyan system was Rajakariya ("the king's work"), which linked each caste to an occupation and demanded service to the court and religious institutions.

There were differences between the caste structures of the highlands and those of the low country, although some service groups were common to both in ancient Sri Lanka. The southwestern coast had three other castes (the Salagama, the Durava and the Karava) in addition to the majority Govigama, which was common throughout the region. Some of these castes' ancestors are believed to have migrated from Southern India and have become important in the Sinhalese social system. The first-century BC Anuradhapura Abayagiri inscription referring to a Karava navika may be the first reference to a specialized occupation.