Al-Biruni attempted to understand the caste system by drawing parallels with other societies. He noted that ancient Persia also recognised four social categories—knights and princes; monks, fire-priests and lawyers; physicians and scientists; and peasants and artisans. Through this comparison, he suggested that social divisions were not unique to India. However, he pointed out that within Islam, all men were considered equal, differing only in their observance of piety.

His description of the varna system was deeply influenced by his study of normative Sanskrit texts. He described the Brahmanas as the highest caste, created from the head of Brahman, followed by Kshatriyas from the shoulders and hands, Vaishyas from the thigh, and Shudras from the feet. He depended almost exclusively on the works of Brahmanas, citing the Vedas, Puranas, Bhagavad Gita, and Manusmriti.

Despite accepting the Brahmanical description, Al-Biruni disapproved of the notion of pollution. He argued that everything which falls into a state of impurity strives to regain its original condition of purity. He cited examples such as the sun cleansing the air and salt preventing water from becoming polluted. According to him, the conception of social pollution, intrinsic to the caste system, was contrary to the laws of nature.

However, Al-Biruni's understanding had limitations. His description was based on texts from the Brahmanical perspective, while in real life the system was not quite as rigid. For instance, the antyaja (born outside the system), though subjected to social oppression, were included within economic networks, providing inexpensive labour to peasants and zamindars.