The primary purpose of the study is to investigate the relationship between information transparency and stock liquidity in Pakistan Stock Exchange (PSX). We also examine other aspects of stock liquidity by considering the impact of extreme market events on stock liquidity and liquidity commonality, and their respective association with transparency and firm value. Data analysis for the study is performed on sample of 40 non-financial firms listed on KSE-100 for the time period of 2010-18. Estimations are carried out using Ordinary Least Squares (OLS) and Generalized Least Squares (GLS) models. The results reveal significant negative relationship between transparency and stock liquidity in PSX. In addition, the results also highlight that variability of the liquidity and extreme market events both decrease the firm value. The findings of the study hold important academic and regulatory implications about financial and regulatory environment, investor behavior and information environment of PSX.