Pakistan is a developing country of the Monsoon Asia with dense concentration of population in the plain areas of the Indus and other rivers. Due to its unique geographical setting, it is prone to various natural disasters including floods. There is a whole trail of death and destruction left behind by devastating floods. But, the 2010 floods in the country were unprecedented because of their vast areal coverage, loss of thousands of lives and large-scale destruction. This study is an analysis of the impact of the 2010 floods on the environment and economy of Pakistan. The study begins with the environmental characteristics of the study area to understand the drainage, water availability and flooding patterns in different parts of the country. Then, a study of the flood history of Pakistan has been undertaken to identify possible causes of floods, rescue and management operations and preparedness for the future. The immediate damage and losses to the environment and economy have been separately studied, followed by the impact of the floods resulting from widespread damages to the different sectors of the economy and environment. The study reveals that the floods had a severe impact on the habitat, ecology and lives of thousands of animals in the country. The actual impact on the environment was so vast and far-reaching that it is difficult to comprehend and express it in numerical terms. Therefore, in the study it has also been argued that loss of buildings, infrastructure and agriculture is actually a loss of environment. All sectors of the economy were affected by the floods but agriculture, housing and transport and communication sectors were severely hit and had brought the whole country to a standstill. Rescue and rehabilitation efforts carried out with the help of international cooperation achieved some degree of success. But, for the future, Pakistan has to take many physical, organisational and technological measures to deal effectively with natural disasters including floods. There are many lessons to be learnt from the disastrous 2010 floods and hopefully this study will be useful in that direction.