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The global changes have occurred throughout the 20th century and there is no reason to believe that they will slow down their pace in this millennium. The disintegration of the Soviet Union with its defeat in the Cold War and the terrorist attacks of September 11 have changed geopolitical environment and generated new forms of instability in the world and particularly in South Asia. These events also damaged those traditional international security arrangements that were evolved after the World War II. This paper will examine the major challenges and trends in Pakistan’s foreign policy after the terrorist attacks of September 11, 2001 that caused major shift in the US policy towards the region and the issues pertaining to the US-led global war that has much significance for Pakistan.