This research is conducted to determine the roles played by Pakistani government in the development of Islamic financing as compare to Malaysian government. Islamic financing is the concept that is vastly used by the muslim countries these days to eradicate interest from their economies. The need for the development of Islamic financing arises as an essential system required changing for the islamization of the economy of Pakistan. Role of the government of Pakistan is analyzed and compared with the roles of Malaysian government for the development of Islamic financing. In both countries Islamic banking is relatively new concept with lack of research. Descriptive methodology is used to analyze the performance of both countries based on the documented records. It has described the current roles of the both governments, their advantages, disadvantages and developments. Based on the available literature and documents it is difficult to compare the both countries performance. Pakistan experience of Islamic financing is almost half of the Malaysian experience. It is found that the pace of developments in Pakistan is very slow as compare to Malaysia. This study suggests that the timely implementation of planed strategies by Pakistani government is necessary. Supervisor:- Mr. Lutufullah Saqib