This study will analyze the impact of terrorism on foreign direct investment in Pakistan. Since Pakistan become non-Natto alley and play a vital role in “War of terror”, this also affected foreign direct investment (FDI) inflow in Pakistan. Therefore this studies empirically analysis the impact of terrorism on FDI inflow to Pakistan for the period 2001-2016. We applied OLS, ADF unit root, Cointegration analysis for the estimations and found that FDI inflow has adverse effect on FDI inflow in Pakistan. Government need to control the terrorist activities in country that might help to increase the FDI inflow to the country.