Pakistan has been taken off the US human smuggling watch list due to an improvement in its anti-trafficking performance, the government says.
The authorities have carried out more prosecutions, the US says
Interior Minister Aftab Sherpao says the country has won praise from the US for its efforts against human trafficking and modern-day slavery.
"We have improved our prevention and prosecution record," he said.
Pakistan is one of the major transit points for human smugglers in Asia.
The US ambassador to Pakistan Ryan Crocker delivered a copy of the fifth Trafficking in Persons Report to Mr Sherpao on Thursday.
The 150-page report - regarded as a leading document on human trafficking - is due to be released on Friday.
Mr Sherpao told reporters in Islamabad that the report acknowledges Pakistan's efforts in curbing the menace.
"The report notes the increased number of prosecutions and convictions," he said.
"It also acknowledges stronger implementation of anti-trafficking laws and the performance of the anti-trafficking unit recently set up in the federal investigation agency."
The US ambassador said improvements in all these areas "would be important in the coming year".
"We look forward to further cooperation on trafficking-in-persons issues," he added.
According to figures provided by the interior ministry, 615 cases were registered against alleged traffickers in 2004.
Overall, 501 people were arrested on trafficking related charges and 53 of them were convicted out of the 261 cases put on trial.
In comparison, 416 cases were registered in 2003 and there were only six convictions out of the 350 cases that went on trial.
Pakistani officials say they have recently made major inroads against trafficking.
In February this year, a leading trafficker was arrested and 500 passports were recovered from him in Karachi.
Information gleaned from the suspect led Pakistani authorities to black list 144 travel agents.
It also triggered a crackdown against the Federal Investigation Agency - Pakistan's premier anti-smuggling outfit - which was found to be involved in the racket.
Interior ministry officials say 110 FIA personnel were investigated for their alleged role in human trafficking and most of them were dismissed from service.
Over the last four years, the Sultanate of Oman alone returned 33,000 Pakistanis who had entered the country on fake documents supplied by the traffickers.