The study attempts to investigate the impact of democracy on sustainable human development. Three human development indices are employed to observe development i.e. Human Development Index (HDI), Extended Human Development Index (EHDI) and Sustainable Human Development Index (SHDI). These indices are developed by using standard procedure prescribed by UNDP. The data is taken from World Development Indicators (WDI) over the period 1996-2010. The fixed effect estimation technique is applied to analyze the effect of democracy on human development indices. The overall results show that the democratic regime outperforms the autocratic regime across a wide range of development indicators. This implies that democracies improve human development indicators along with environmental quality. The findings strongly support that human development is compatible with, as well as strengthen by individual freedom in addition to political democracy, suggesting that democracy promotions are essential not merely for human development but also for sustainable human development. Effects of trade openness, population growth and government expenses are also observed on development. Empirical findings suggest that trade openness and government expense have positive impacts on human development indices while population growth negatively contributes to human development indices. Supervisor:- Dr. Nasir Iqbal