This paper attempts to inspect the upshot of remittances inflow on real exchange rate over the period of 1980 to 2014 in Pakistan.The main objective of this empirical study is to establish the long run relationship amid remittances and real exchange rate.To examine the long run association between remittances and real exchange rate in the existence of control variables including Inflation and Terms of Trade (TOT),this study applied autoregressive distributed lag model (ARDL) an econometric technique for co-integration.For the short run association amid remittances and real exchange rate,this study uses error correction mechanism (ECM).The result indicates that remittances inflow causes real exchange rate appreciation.Further,there exists negative relationship between terms of trade and real exchange rate.However,inflation is positively related with real exchange rate.