Urbanization and economic growth are affiliated process with each other. These two phenomenon’s’ goes side by side. Any economy cannot raise its income level until sufficient share of population shift to cities. Because cities are considered to be engines of growth (Sarah, 2016). Urbanization is important factor in economic growth of economy (Bairoch, 1988). Urbanization not only caused by economic growth it also a sufficient condition for economic growth (Gallup et al., 1999). Urbanization is important for economic growth this not important that every resident of city get benefits. Gulabrao, in 2013 argued that there is nonlinear relationship after the certain level of population in urban areas its effect changes to negative. Everything has some type of upper limit. Similarly cities have some limit of absorbing population after that public sector have to face the challenges like shortage of jobs, housing, etc. hence in this study threshold level of urbanization for economic growth is computed in order to introduce polices which will maintain the population cities around the certain level. This study will check the impact of urbanization on economic growth and also compute the threshold level of urbanization for economic growth after which relationship gets reversed.in this study in order to choose appropriate estimation method which suits the data, the Hausman test(Hausman.s J.A, (1978). will be used to choose between two models random effect and fixed effect in order to estimate static panel data model. In order to estimate dynamic panel data D-GMM of Arellano & Bond (1991) will be used. Because AR (1) Panel data is introduced one lag of dependent variable is used in model as explanatory variable and it violates the condition of exogeneity. Supervisor:- Dr Attiya Yasmeen Javed