The fundamental relationship between money supply, prices and income in Pakistan was determined in this research study. The time series data of real gross domestic product (GDP), nominal GDP, prices and money supply for the period of 1973 to 2007 was used. The stationary properties of the data series were investigated with the help of ADF test and series were found integrated of the order zero. The results indicated a relationship between the growth of money supply and inflation in Pakistan during the study period. The estimated coefficient between the growth of money supply and inflation was positive and significant. Monetarist proposition that money supply determined the price levels and income was accepted in the light of the results of this study. The tight monetary policy along with fiscal measures was suggested to control inflation in Pakistan.