The study explored teacher performance appraisal (TPA) and its influence on teachers' motivation in a secondary school in Karachi, Pakistan. TPA is perceived as an important tool for improving the quality of teaching and learning in the domains of content knowledge, teaching skill and attitude. However, TPA is also considered as an instrument for administrative purposes such as the provision of merit increment, promotion, demotions and weeding out the incompetent teachers from their services. It is the general impression that TPA influences teachers' motivation in both negative as well as positive ways. In order to have an in-depth understanding, the study explored TPA and its influence on teachers' motivation in a Secondary School in Karachi, Pakistan. Moreover, the nature of the study made me opt for qualitative research method and case study approach, in which I examined the perceptions, beliefs and live experiences of research participants in a real context (school). Moreover, semi-structured interviews, informal conversations and document reviews were used in the study as methods of data collection tools. Findings reveal that TPA serves two major purposes that is the improvement-oriented and accountability-oriented purpose. The former is to find out the strengths, weaknesses and plans for further improvement, which influence teachers' motivation positively towards their work. The latter is to give judgments, and this judgment makes teachers de-motivated. In its improvement-oriented sense, TPA is used for providing feedback and professional development opportunities to teachers in order to improve their teaching and learning. Accountability-oriented TPA is nestled with merit increment, promotion and dismissal of low performing teachers. Decisions are taken on the basis of academic and non-academic performances, based on multiple sources of data such as; classroom observation, peer-appraisal, gathering evidences from student learning outcomes. Finally, findings pointed out some of the key factors, which influence teachers' motivation, that are: the nature of individual and institutional interests, nature of appraisal feedback, reward and recognition, merit increment, shared and unshared purposes and criteria of TPA.