Pakistan is a federal republic with a complex system of government. The federal government shares power with the provincial governments, but the distribution of power between the two levels of government has been a contentious issue since the country's independence. This paper examines the major federal issues in Pakistan from 2013 to 2023, including the impact of political instability and polarization, economic challenges and opportunities, and the rise of extremism and intolerance of diversity and dissent. This article aims to explore and analyze these issues from a multidisciplinary perspective, using the secondary sources of data. The article argues that Pakistan’s federal system has been under strain due to various internal and external factors, such as corruption, nepotism, civil-military relations, ethnic conflicts, terrorism, regional rivalries, and global pressures. The article suggests some possible solutions and recommendations for improving the federal governance and performance of Pakistan, such as constitutional reforms, fiscal decentralization, institutional strengthening, social inclusion, and dialogue. The article concludes that Pakistan’s federal system has the potential to overcome its challenges and achieve its prospects, if there is a genuine commitment and cooperation among all stakeholders.