The population of Djibouti was 460,700 in 2001, yielding a population density of 20 persons per sq km (51 per sq mi).The population is 83 % (1999) urban. The capital, principal port, and only sizable city is Djibouti, located on the southern side of the mouth of the Gulf of Tadjoura. Roughly 60 % of Djiboutians are ethnic Somali, the predominant group in the south, and about 30 % are Afar, the main group in the north. Arab, French, and other minorities make up the remaining population. Of the Somali, more than half belong to the dominant Issa clan. Djibouti’s official languages are French and Arabic, but Somali is the most widely spoken language in the south, including the capital. The Afar language prevails in the north. Almost all Djiboutians are Sunni Muslims.

The Afar (Denakil, or Danakil) speak a language that forms a dialect continuum with Saho. Saho-Afar is usually classified as an Eastern Cushitic language of the Afro-Asiatic language phylum. The Afar live in the sparsely populated areas to the west and north of the Gulf of Tadjoura. This region includes parts of several former as well as extant Afar sultanates. The sultans' roles are now largely ceremonial, and the social divisions within the orthodox Afar hierarchy are of diminished importance.

About two-thirds of the Republic of Djibouti's 652,000 inhabitants live in the capital city. The indigenous population is separated between the majority Somalis (predominantly of the Issa tribe, with minority Issak and Gadaboursi representation) and the Afars (Danakils). All are Cushitic-speaking peoples, and nearly all are Muslim. Among the 15,000 foreigners residing in Djibouti, the French are the most numerous. Among the French are 3,000 troops.