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Two major developments dating from the 1970s - the rise of migration to the Gulf and the Soviet invasion of Afghanistan – have led to a transformation of Pakhtun areas in Pakistan as well as in Afghanistan, bringing impacts on every aspect of the society, including the Pakhtun code of life, Pakhtunwali. The worsening security situation has led to a dearth of anthropological research in the Pakhtun regions in both countries. Most recent research relies on older outdated works and hence fails to take account of these momentous changes. For example, the dominant perspective still portrays Pakhtunwali mainly as a violent code involving revenge killings in feuds that are carried on for generations, which is no longer the case. My focus of study is a Pakhtun village in the Lower Dir district of Khyber Pakhtunkhwa province, Pakistan. The village lies outside the tribal areas and the main source of income of the local people is remittances from the Gulf. The remittances have changed the village social structure and resulting in an increase in the number of landholders and an erosion of traditional social structure. Because of these changes Pakhtunwali has transformed, adjusting to the new socio-economic and religio-political set-up. Under these changed conditions, the complex of customary practises known as gham khadee (sorrows and joys) has emerged as the most salient feature of Pakhtunwali. Gham khadee refers to a number of practises ranging from participation in funerals and weddings to mutual favours among people in various matters of daily life. The tenets of Pakhtunwali, e.g. badal (revenge) , melmastya (hospitality), khegada (doing good), and tarburwali (cousin rivalry) are all performed within gham khadee occasions. However, the prominence of gham khadee does not mean that other tenets, e.g., violent badal, have completely ended; rather, the practise of violent badal has decreased. This thesis investigates the diverse and changing patterns of social relations among Pakhtuns, with particular attention to the ways in which social relations are guided by the practise of gham khadee. Given that political position among Pakhtuns is tied to honour, this thesis also investigates how gham khadee and the doing of favours help leaders build up their profile as well as create a political following. I take the prominence now given to gham khadee to be a manifestation of Pakhtunwali in the contemporary Pakhtun society living under the state’s laws.