Objective: Safe and effective use of the medications is a challenge in the developing countries of the world. The objective of this study was to assess and evaluate the quality, storage/dispensing practices and regulatory compliance, of retail/wholesale drug stores and drug distributors operating in Karachi, Pakistan. Methods: A cross-sectional survey of retail/wholesale drug stores and drug distributors, located in Karachi was conducted from May to December 2013. A total of 1003 retail/wholesale drug stores and nine distributors involved in the sale/purchase and dispensing of pharmaceutical products were enrolled in the study. A non-probability purposive sampling technique was used and the information was collected using a close ended, structured questionnaire, designed to gather information related to demographics of store and drug seller, storage practices, licensing status and knowledge/practices of drug sellers. The data was collected by the team of data collectors and the results were analyzed using Stata 11.2. Results: The results of study indicated that out of 1003 retail and wholesale drug stores inspected only 4.1% (n=41) were found compliant to regulatory requirements. Very few of the stores were involved in the exclusive sales of drugs, most of them 74.9% (n=752) were selling general items and other commodities along with the drugs. Only 12% (n=124) of the stores were having medical professionals working on the store, out of which 33% (n=41) were pharmacists and the rest were dispensers. The drug stores were dominated by male dispensers, with a mean age of 34.1years (SD±9.7), average work experience of 12.4 years (SD±7.6) and 12.9 years (SD±2.2) of education. Twenty-four percent (n=244) of the drugs sellers were aware of the fact that vaccines and refrigerated drugs, needs to be stored at 2˚C-8˚C. Only 14.3% (n=144) of the drug sellers were aware about the correct classification and use of selected essential drugs, and 17.9% (n=179) of the drug sellers were able to respond correctly to the commonly used prescription terminologies. The dispensing practice revealed 62% (n=625) of the stores were found selling medications without prescription. Less than 10% of the drug sellers provide information related to indication of drugs, duration of therapy, and interaction with other drugs or food. Only 1.6% of the stores were providing any written information to the patient at the time of dispensing. The storage practices revealed only 40.2% (n=403) of stores were protected from direct sunlight and 5.4% (n=54) having air conditioning in the premises. Total of 11.4% (n=94) stores were selling vaccines without proper refrigerator and only 11.7% stores had the power backup for the refrigerator. Forty-seven percent (n=400) of the stores had drug sales license displayed in the premises out of which 33.4% (n=282) were having expired drug sales license. As compared to the retail/wholesale drug stores, the storage and distributor practices of the drug distributors operating in Karachi were in line with the regulatory requirements laid down by the authorities. Conclusion: The regulatory compliance of majority of the retail/wholesale drug stores operated privately in different areas of Karachi is below standard. Only a few drug stores have adequate facilities to protect the drugs from extreme temperature, sunlight and provision of refrigeration. Very few of the drug stores carry out drug sales under the supervision of qualified pharmacist. The drugs are mostly sold without prescription, and the knowledge and skills of the drug sellers are insufficient to promote the safe use of medications. There is a dire need to improve the storage practices in the drug stores by complying with the regulatory standards/laws, and support from pharmaceutical industry. The knowledge of drug sellers needs to be improved by continues trainings and the presence of qualified pharmacist needs to be ensured in the drug stores.