The excited states in the transitional nucleus $^{131}\mathrm{Xe}$ have been populated by using $\ensuremath{\alpha}$-induced fusion-evaporation reaction and the de-exciting $\ensuremath{\gamma}$ rays were detected with the Compton suppressed clover detector setup of the Indian National Gamma Array coupled to digital data acquisition system. The existing level structure of $^{131}\mathrm{Xe}$ has been significantly extended with the observation and placement of 72 new $\ensuremath{\gamma}$-ray transitions. The use of light-ion ($\ensuremath{\alpha}$) beam helped to identify several new band structures in $^{131}\mathrm{Xe}$ with different quasiparticle (qp) configurations. The multipolarities of the observed $\ensuremath{\gamma}$ rays have been determined on the basis of the directional correlation from oriented states ratio and polarization asymmetry measurements. The yrast negative-parity band has been confirmed up to ${35/2}^{\ensuremath{-}}$ spin and the highly nonyrast signature partner of this band has been identified for the first time. The positive-parity band, based on the ${3/2}^{+}$ ground state, has been extended up to ${23/2}^{+}$ with the observation of a signature inversion, which signifies a pair of particle alignment around the spin of 15/2 $\ensuremath{\hbar}$. A dipole band, consisting of $M1$ transitions has been identified and assigned a 5-qp configuration. A new band structure built on a 3-qp ${23/2}^{+}$ state has been observed with a large signature splitting. A comparison in the isotopic and isotonic chains reveals the transitional nature of the $N=77$ nuclei. Total Routhian surface calculations have been performed to understand the structure of $^{131}\mathrm{Xe}$ associated with different configurations.