E-commerce has flourished in the developed world and is playing an important role in the everyday lives of the people and national economies. The developing nations are far behind in this regard even though their governments have made considerable efforts to encourage e-commerce. This thesis is a study of the environmental factors that act as barriers to the development of e-commerce in Pakistan. It shows the nature and the level of hindrance these environmental factors have caused and there relation to one another. In order to make a national analysis, environmental factors have been stretched to include the government, businesses, consumers, physical infrastructures, social and cultural factors. A qualitative study was conducted via telephonic and written interviews from academic and professional experts, users and non users of e-commerce in Pakistan. The analysis of these interviews revealed that not all of the factors considered as e-commerce barriers for developing nations were present in Pakistan. The relation between different e-commerce barriers was studied and further, additional barriers were also identified. Low literacy rate, traditional economic sector, failure of government to successfully implement e-commerce initiatives and regulations, shortage of electrical supply and low demand for online businesses and the consumer purchasing behaviour of Pakistanis were identified as the main e-commerce barriers.