This study examines the dynamics and drivers of Flight to liquidity (FTL) phenomena in context of Pakistani equity market from 2004 to 2018. This study use different proxies of liquidity e.g (roll estimator, turnover rate, Percentage of zero returns Amihud illiquidity (2002), modified form of Amihud (2002), and volume) rather than using a single measure, because a single proxy of liquidity cannot capture the all aspects of liquidity (Amihud, Hameed, Kang, & Zhang, 2015). This study provides an insight about the behavior of liquidity and excess stock return during crises period. Furthermore, liquidity is divided into expected and unexpected illiquidity and analyze its impact on excess stock return. The results indicate that unexpected illiquidity is statistically significant which reveal that there is a probability that crisis prevailing in the market. Moreover, this study also analyzes the role of financial crisis period in explaining excess return at time t and time t+1. The empirical analysis suggests that crisis period statistically significant effect excess stock return during and after crisis period. These results indicate that the existence of “FTL” phenomenon is there in the stock markets during financial crisis period. The study suggests that investors can reallocate their portfolio and make better informed decision. Supervisor:- Dr. Ahmad Fraz