Laser self‐pulsing was a phenomenon exclusive to macroscopic lasers until recently, where self‐starting laser pulsation in a microscopic photonic crystal Fano laser was reported. In this paper a theoretical model is developed to describe the Fano laser, including descriptions of the highly‐dispersive Fano mirror, the laser frequency and the threshold gain. The model is based upon a combination of conventional laser rate equations and coupled‐mode theory. The dynamical model is used to demonstrate how the laser has two regimes of operation, continuous‐wave output and self‐pulsing, and these regimes are characterised using phase diagrams, establishing the regime of self‐pulsing numerically. Furthermore, the physics behind the self‐pulsing mechanism are explained in detail and it is demonstrated how cavity absorption makes the Fano mirror function as a saturable absorber, leading to Q‐switched pulse generation. A stability analysis is used to demonstrate how the dominant mechanism of instability is relaxation oscillations becoming un‐damped. Finally the effect of varying key self‐pulsing parameters is investigated by characterisation of the change in self‐pulsing regions.