This study is an attempt to identify the relationship of service quality and students‟ satisfaction at university level in the province of Punjab, Pakistan. Major objectives of the study were to explore the gaps in the service quality, gender based difference in the perceptions, expectations and satisfaction of the students regarding service quality of the six sampled universities. Moreover, the least contributing and the most contributing factors to students‟ satisfaction were also determined. The study was restricted to public sector formal and general education universities recognized by the Higher Education Commission of Pakistan. The population of the study consisted of all the students enrolled in the ten universities. The students studying in the final year of Masters or in the final semester of BS (Bachelor of Science) were the target population. By using simple random sampling technique, a sample of six universities was selected. From each sampled university, four faculties namely Social Sciences, Life/Natural Sciences, Business / Commerce, and Languages/ Arts were included in the study. In the second stage, one department from each faculty and four departments in total from each sampled university were selected randomly. A self-developed questionnaire, validated by experts and piloted for (r = .90) was used for data collection. The students of randomly selected departments, studying in final year/ semester at Masters and BS level responded the questionnaire. The sample comprised 938 students, including 333 males and 605 females. The Data, collected through the questionnaire, were analyzed by using SPSS 20 version. MANOVA, ANOVA, independent sample t- test, multiple stepwise regression and Pearson product-moment coefficient of correlation were applied. The study found gaps in all the five dimensions of service quality. It also found no significant difference in the perception and satisfaction of male and female students. With regard to expectations of the students, a significant difference was recorded as female students had more expectations than the males. Empathy as the least contributing and responsiveness as the most contributing factors to students‟ satisfaction were concluded. The students studying in the sampled universities were found dissatisfied with the service quality. Finally, the study identified a strong positive correlation between service quality and students‟ satisfaction at university level. It is recommended that universities should regularly conduct student satisfaction surveys to bridge the gaps in all the five dimensions of service quality.