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A refugee is a person who has been displaced and forced to cross the border because of the situation of conflict or war in the country. After the World War II the UN adopted a legal definition of refugee. In the light of this convention, refugees have got some rights that includes right to return, right to family unification, right to travel and restriction to forward movement. There are two main perspectives on refugee influx. The first is humanitarian perspective and the second is political and military. Pakistan has remained a home for more than a million of Afghan population, i.e. among the world’s largest refugee population, for past 40 years. The issue of Afghan refugees in Pakistan is the protracted one because of long conflict in Afghanistan by the major powers in the past, and now the terrorist organizations, violence and political and economic turmoil has kept the refugee influx alive in Afghanistan. The presence of the huge mass of Afghan refugees residing (or having lived) in Pakistan is testament of the international community, regional stakeholders, and Afghan national regimes inability to solve the root causes of massive human displacement – conflict, disaster, oppression, and chaos. Over the years, the Afghan refugee crisis has greatly caused a stern in Pakistan-Afghan relations. This is primarily due to war on terror, domestic threat posed byrefugees, fragile Pakistan economy and declining donor assistance. In total there are three million registered and unregistered Afghan refugees exist in Pakistan (Nation, 2016). Making Pakistan vulnerable to security issues, mass movements and illegal trade of drugs and arms from Afghanistan. The Afghan refugees in Pakistan are given a legal status until the end of 2017 (UNHCR, 2017). UNHCR takes care of the refugees by providing assistance but for only registered number of refugees. It also provides assistance to return to their homeland through Voluntary Repatriation Program. But most of the Afghan families are hesitant to return back to the country due to fragile conditions in Afghanistan. The paper proposes an integrated counter-terrorism policy response wherein national security and humanitarian interests are inevitably inter-linked.