The US-led War on Terror in Afghanistan conducted for the aim of eliminating Al- Qaeda and Osama-bin-Laden has brought about enormous economic, social and political changes in the region. Pakistan’s role as a front-line state in the War on Terror has had profound implications for its domestic politics and foreign policy. Pakistan not only took a U-turn on its Afghanistan policy, but also had to crack down on internal extremism and terrorism. Several military operations were carried out against the so- called terrorist factions in tribal areas and some other parts of the North West Frontier Province (NWFP), renamed as Khyber Pukhtunkhwa (KPK) under the 18th Amendment to the Constitution of 1973 of Pakistan. With a majority Pashtun population, KPK has been a target of the War on Terror due to its social structure, cultural restraints and the religion of its inhabitants on the boundary with Afghanistan. The socio-cultural similarities and geographical proximity with Afghanistan have made it a sanctuary for Al-Qaeda members. The War on Terror in KPK has had negative political, economic and social repercussions for the region and thus has created hatred among the Pashtuns. This paper is an attempt to analyze the factors which made the Pashtuns of this area prone to militancy. It will analyze the political, economic and social implications of the War on Terror for KPK in general and its Pashtun population in particular.