The economy of Pakistan has a checkered history over the last fifty years. The phases of recession and boom in the economy have affected all sectors with structural changes and the erratic pattern of growth of GOP. The environment and the natural resources of the country have been under tremendous pressure and have degraded over time, worsening the prospects for sustainable development. This paper identifies linkages between economic development and environment of the country over time. The major environmental issues, potential threats to the country ‘s economy, have also been explored.