The central aim of this study is to scrutinize the factors which determine adaptive capacity or ability to resilience against any adverse shock in Pakistan by using PPHS (2010) data source. Moreover, study extends its objective to develop a vulnerability index to see through the gender wise rural and urban differential and Vulnerability index has been constructed as a composite index of seven components i.e. socio-demographic profile, livelihood strategies, social networking, health, water, and climatic changes and natural disasters. These components are determined by different indicators and ultimately equal weightage method has been employed to construct index. Having constructed this index, adaptive capacity, sensitivity index, and exposure index has been also constructed as recommended by IPCC. Findings show that, female headed households face more vulnerable situation as comparing with male headed households. These differences are found even in rural and urban areas as well. Female headed households reside in rural areas are found more vulnerable comparing with male headed households. Study further decomposes rural effects; non-farm households which lived in rural areas other than farmers, commonly, known as “Kami” are found facing higher vulnerability while comparing with farmers and urban households. Interestingly, adaptive capacities of rural households are much better than that of urban households. It is may be due to strong prevailing social network. Finally, for empirical purpose, results obtained from ordered logit model suggest that female household heads have lower adaptive capacity than males. Further, education, access to loan and livestock holding are found important and significant determinants of households’ adaptive capacity or ability to resilient. Supervisor:- Dr. Nasir Iqbal