Elections were held as scheduled in November 1988. Pakistan People’s Party won 94 seats in the National Assembly with out forming any alliance. With the cooperation of 8 MQM members and 13 members of the Federally Administered tribal Area, the PPP showed clear majority in the National Assembly. Benazir Bhutto, daughter of Zulfikar Ali Bhutto was sworn in as the Prime Minister - the first woman to govern an Islamic state.

After becoming Prime Minister Benazir Bhutto announced that the ban on student unions and trade unions would be ended. The PPP government hosted the fourth SAARC Summit Conference in December 1988. As a result of the Conference Pakistan and India finalized three peace agreements. Benazir’s government started facing problem on the political front. ANP deserted the Pakistan People Party and on November 1, 1989, a no confidence motion was moved against the Prime Minister by the opposition. Benazir was barely able to pull through with 12 votes to her advantage. MQM who had formed an alliance with the PPP also broke away and started creating trouble in Sindh.