The Institute of Business Administration (IBA), the oldest graduate business school outside North America, was established in April 1955 in collaboration with the Wharton School of Finance and Commerce, University of Pennsylvania. Later, it was associated with the University of Southern California. The United States Agency for International Development (USAID) spent $10 million on establishing facilities at IBA. Fifty prominent American professors were assigned to IBA, while 72 Pakistani faculty members received advanced degrees from Wharton and USC. The UNCTAD/GATT International Trade Centre, Geneva, has selected IBA as a Centre of Excellence for training Pakistani exporters. IBA is the largest graduate business school in the Third World.

The two IBA campuses at the University and in the City, occupying a total area of 80 acres, excel in size and beauty several business schools in USA and Canada. Excellent hostel facilities are available at a reasonable cost. The two libraries of IBA contain the largest collection of books on business administration, Pakistani and foreign journals and research reports on Pakistani business. The IBA Centre for Computer Studies, established in collaboration with IBM World Trade Corporation, has the mainframe IBM system 4331 model 102 computer, a miniframe IBM system 34 mini computer, and personal computers. Recently IBA has purchased and installed IBM system AS/400 model E10. Modern teaching aids are an integral part of education system at IBA. Institute's own transport is available to the students from convenient points in the city.

The location of IBA in Karachi, the financial centre, and the largest industrial city of Pakistan, where the head offices of multinational and many Pakistani corporations are located, gives an added advantage to its students and faculty for research, internship and informal environmental learning with no other city can offer.