The modern Balinese language shows the reflections of the Proto Austronesian language that can be one of the evidences that linguistically can be used to trace back the origin of the Balinese. It should certainly be supported by artifacts and other historical records. It is also known that the descendents of the indigenous people who populated the island were the Bali Aga, who practiced animism.

Prehistoric artifacts that were discovered include grave sites, the sarcophagi stone and the "Moon of Pejeng", a huge bronze kettledrum that is thought to have supernatural powers and is today kept in a temple in the village of Pejeng. Others were recently found in the Buleleng area.

Some historical records found from the time of c. 300 BC identified a more advanced and organized agrarian society. By then, complex irrigation systems supplied cascading rice terraces in wet rice cultivation. As a result, rice was already well and truly established as the major food commodity in Bali, and as its abundance and importance increased, so did its value. Dewi Sri, the ancient rice goddess, was revered then as she still is today through cili figures given as offerings. Based on the large produce of rice crops, communities became wealthier and wealthier and developed into more sophisticated kingdoms, each with ruling rajahs or kings.