Private sector investment in agricultural research in Pakistan, although growing in importance, is limited at present and with a few exceptions, has not had a significant impact on agricultural production and productivity. The publicly funded agricultural research system has made the major contribution to increases in production and productivity growth. However the impressive gains of the past cannot be achieved with the current underfunded public research system which makes it all the more important for private sector investment in agricultural research to achieve its full potential in areas of its comparative advantage. This paper identifies the magnitude of private sector agricultural research investment in Pakistan and discusses some of the current policy constraints that hamper its scope. Information was gathered through informal and formal surveys of multinational and national firms conducting agricultural research in Pakistan in the areas of inputs and product processing. Although private sector investment in agricultural research has more than doubled in the past ten years, uncertainty persists surrounding privatisation issues, unresolved intellectual property rights regulation, and the enforcement of seed certification and truth-in-labelling rules and regulations.