Pakistan faces today high levels of population growth entailing a large population of schooling age, and low levels of economic development, with increasing spread of poverty and unemployment over the past few decades. While education has been emphasized by the government and international development agencies to play a central role for the successful development of Pakistan, progress realized at all levels have been meagre and this for two main reasons: The investments in education have been too low and the schooling age population has been growing too fast. With 35 per cent of its population below age 15 in 2010; Pakistan was spending less than 3 per cent of its GNP on education. Consequently still 39 per cent of 15-24 year old Pakistani women were illiterate in 2008 and 21 per cent of men (UNESCO database) Still Pakistan is experiencing a decline in birth rates and population growth begins to level off as part of the demographic transition. The last Demographic and Health Survey of Pakistan conducted in 2006-2007 shows that highly educated women are at the forefront of the fertility decline with a total fertility rate (TFR) of 2.3 children – close to replacement -- contrasting with the TFR of 4.8 for women with no education. The paper will explore through multi-state population projections by levels of educational attainment how the potential fertility and educational developments could impact on future population growth and on the human capital of the country to 2050. The next few decades will be crucial for Pakistan as the majority of its population will be of working age – at present the median age in Pakistan is 21.7 years. The demographic bonus could however transform into demographic distress and social unrest if decision makers fail to improve education levels and to develop the economy to provide work opportunities for the coming generation of more educated male and female Pakistani. The objective of this paper is two folds: (a) To emphasize human capital development in Pakistan and changes in levels of educational attainment, especially of women and its impact on the demographic transition, and (b) to look at how women’s education can influence fertility and limit population growth.