thumb|left|290px|PNS Nazim, took part in the [[Vietnam War|Vietnam and Korean Wars in the U.S. Navy as USS Wiltsie. She is now serving in the Pakistan Maritime Security Agency as its "on-sea" headquarters.]]
With no naval aviation branch to guard the Karachi port, the Indian Navy breached the seaborne borders of Pakistan and successfully launched the first missile attack, consisting of three Soviet-built s escorted by two anti-submarine patrol vessels on 4 December 1971. Two of the warships, and , were sunk, while was damaged beyond repair. The Pakistan Air Force now covering for Karachi made several of the unsuccessful attempts to engage the Indian Navy's missile boat squadron by carrying out the aerial bombing missions over the Okha Harbor– the forward base of the Indian Navy's missile boat squadron.
thumb|right|290px| in 1947. She was subjected to a serious [[friendly fire incident during the Indo-Pakistani Naval War of 1971 when the senior naval observers misidentified their own ship as a smaller missile boat, giving clearance to the Pakistan Air Force to mount a missile attack.
The Navy's only long range submarine, Ghazi, was deployed to the area but, according to neutral sources, it sank en route under mysterious circumstances. Pakistani authorities state that it sank either due to internal explosion or detonation of mines which it was laying at the time. The Indian Navy claims to have sunk the submarine.
The submarine's destruction enabled the Indian Navy to enforce a blockade on then East Pakistan. According to the defence magazine, Pakistan Defence Journal, the attack on Karachi, Dhaka, Chittagong and the loss of Ghazi, the Navy no longer was able to match the threat of Indian Navy as it was already outclassed by the Indian Navy after the 1965 war. and ten smaller vessels were captured. Around 1,900 personnel were lost, while 1413 servicemen (mostly officers) were captured by Indian forces in Dhaka. The Indian Navy lost 18 officers and 176 sailors and a frigate, while another frigate was damaged and a Breguet Alizé naval aircraft was shot down by the Pakistan Air Force. Despite the limited resources and manpower, the Navy performed its task diligently by providing support to inter-services (air force and army) until the end.
According to the testimony provided by the Admiral Mohammad Shariff in 2015, the primary reason for this loss has been attributed to the High Command's failure in defining a role for the Navy, or even considering Navy as military in general. Unlike the army or the air force, the naval officers were able to continue their military service with the Navy, and their promotions were relatively quicker than other military branches in 1972–74. After concluding a quick visit in the United States in 1972, President Zulfikar Ali Bhutto used his administrative powers to dishonourably discharge the commission of five senior admirals in the Navy, appointing the junior most Hasan Hafeez Ahmed as the first Chief of Naval Staff of the Navy. In 1973, the Navy NHQ was permanently moved to Islamabad to provide synergy with the Army GHQ in Rawalpindi.
thumb|right|290px|The Gearing-class PNS Taimur (former ) was acquired from the United States in 1977. She was sunk as a target during a naval exercise in 2000.
In 1974, the Naval Aviation branch was established with the transfer of the Westland Sea King helicopters from the United Kingdom in 1975, followed by test firing the surface-to-ship Exocet missile as a befitting response to the Indian Navy in 1979. With the ability to fire the land-based Exocet missile from a reconnaissance aircraft, the Navy became the first of its kind in the South Asia to acquire land-based ballistics missile capable long range reconnaissance aircraft.
In 1976, the Navy moved towards successfully acquiring the military computers from the British firm, the Ferranti, to increase its defence's for its coastlines. In 1977, the United States reportedly transferred the two refitted to the Pakistan Navy, which were much superior to the British frigates, followed by obtaining more destroyers from the U.S. Navy in 1982–83. In 1979, the France offered to sell their Agosta-70A-class submarine and was immediately acquired which were commissioned as and . Induction of the Agosta-70A class gave Pakistan Navy a depth advantage over the Indian Navy, and gave the Navy an ability to conduct operations in deeper Indian Ocean at wider range.
In 1982, the Reagan administration submitted the proposal of US$3.2 billion aid for Pakistan that was aimed towards economic uplift and security assistance to the United States Congress as the Navy entered in successful negotiation of obtaining the Harpoon system, despite the strong Indian lobby opposing and objecting of this deal.]]
After the Russian troops withdrawal from Afghanistan in 1989, the Bush administration imposed the arms embargo on Pakistan by uncovering the existence of the covert atomic bomb program to the United States Congress, which ultimately refrained the transfer of the maritime patrol aircraft, missile systems, and defence software on 1 October 1990. Despite embargo, the United States Navy maintained its relations with Pakistan Navy, inviting the Pakistanis to participate in the Inspired Siren in 1994, and gave the Pakistan Navy instructions and run down on the nuclear submarine and aircraft carrier operations. By 1996, the Brown amendment was introduced that allowed the uplifting of the embargo on Pakistan, allowing the transfer of the maritime patrol aircraft to the Navy. Pakistan Navy was forced to deploy its existing war assets when the Indian Navy deployed its warships near Korangi Creek Cantonment and Port of Karachi with their codename: Operation Talwar. On 29 August 1999, another aircraft of the Navy, P3C Orion, was lost due to an accident with the loss of twenty one lives.
Over the issue of the Indian Air Force's shot down of the aircraft, the Navy filed a lawsuit against the Indian Air Force at the International Court of Justice, but the claim was later dismissed due to over-reaching of the court's mandate.