Assesment of vulnerability of a community to climate change requires a holistic understanding of the exposure, sensitivity and adaptive capacity of that particular community. The extant literature on the issue emphasizes importance of enhancing the adaptive capacity of households to improve their resilience to climate change. This study intends to analyze the factors that could define the adaptive capacity of the farming communities of Pakistan.Moreover, role of adaptive capacity in adaptation to climate change and then indirectly its influence on the yield of the major crops of Pakistan has also examined. The accomplishment of above mentioned goals entails a series of analyses.To identify the factors that influence households’ adaptive capacity, we constructed composite Household Adaptive Capacity Index (HACI). The index is constructed by employing assets based approach of Sustainable Livelihood Framework (SLF), where assets are categorized as human, physical, social, and natural capital. SLF views that availability of these assets enables people to respond to climate indicators and other stresses. This part of analysis helps to identify the factors needed to target in order to enhance the adaptive capacity of the households, hence to increase resilience of farmers to climate change. Given the fact that adaptive capacity of farm households functions as the driving force for adaptation, the analysis was further extended to study the adaptation decision and adaptation strategies undertaken. We study the impact of adaptive capacity on decision to adapt and, further examine thereof the expected increase in crop output when farmers are adapting to climate change. To evaluate the influence of different adaptation strategies—in isolation or in combination— on crops productivities, Multinomial Endogenous Switching (MES) Regression model is employed. This technique is adopted to account for the heterogeneity in the decision to adapt or not. Analysis to understand the impact of adaptation to climate change on yield was limited to four major crops of wheat, basmati rice, cotton, and sugarcane. It is asserted here that the analysis was controlled for socioeconomic and demographic characteristics shaping the adaptive capacity and adaptations of the farming community. The findings demonstrate a great deal of IX inequality in adaptive capacity in Pakistan especially among farm households of Sindh compared to Punjab and KPK. The findings further suggest that farmers should be assured with the provision of low-interest rate loans so that they could opt for off farm business, hence improve their livelihood portfolio and reduce dependence on farming. More resources should be deployed on the improvement of health status of farm households, quality of the houses, and provision of gas as a source of cooking. Social security should be provided to decrease the burden on bread winners from elderly and non-working members. Obstacles in effective linkages and collaboration with social groups and networks should be highlighted and removed. Gender should be taken seriously in climate change adaptation, with the provisions of rights and opportunities for the women in rural areas. In order to remove obstacles in farmers’ adaptation to climate change policies should be designed to increase the farm size, quality of extension centers and of the sources of information on climate change, and farmers’ should be facilitated with easy access to credit. Findings of the study further highlight that maximum gains in yield of wheat could be gained by introducing changes in irrigation practices. While, basmati rice producers could earn these gains by adapting the combination of input intensification and irrigation change. The evidence further suggest that cotton producers could receive maximum benefits from an adaptation by combining the change in time of sowing, input intensification and change in the irrigation practice. However, highest gains in the yield of sugarcane could be received when farmers adapt in the combination of input intensification, irrigation change, and varietal change