This research paper examines the determinants dividend payout ratio of companies in the fertilizer sector. This paper checks variable against the dividend payout and tells us that which are most important variables and variables which have no significant relation. The variables taken are earnings, cash flows or liquidity, corporate tax, risk (beta) and growth opportunities. The period of our study is from 2008 to 2010. The companies that were selected were Fauji Fertilizer, Fauji Fertilizer Bin Qasim, Engro Fertilizer and Dawood Hercules. The findings of the research were that liquidity, growth and earnings had a positive relationship with dividend payout, while risk and corporate tax were inversely related. It was also noticed that less risk and firms with more liquidity paid more dividends.