Restrictions on human and industrial activities due to the coronavirus (COVID-19) pandemic have resulted in an unprecedented reduction in energy consumption and air pollution around the world. Quantifying these changes in environmental conditions due to government-enforced containment measures provides a unique opportunity to understand the patterns, origins and impacts of air pollutants. During the lockdown in Pakistan, a significant reduction in energy demands and a decline of ∼1786 GWh (gigawatt hours) in electricity generation is reported. We used satellite observational data for nitrogen dioxide (NO2), carbon monoxide (CO), sulphur dioxide (SO2), aerosol optical depth (AOD) and land surface temperature (LST) to explore the associated environmental impacts of shifts in energy demands and emissions across Pakistan. During the strict lockdown period (March 23 to April 15, 2020), we observed a reduction in NO2 emissions by 40% from coal-based power plants followed by 30% in major urban areas compared to the same period in 2019. Also, around 25% decrease in AOD (at 550 nm) thickness in industrial and energy sectors was observed although no major decrease was evident in urban areas. Most of the industrial regions resumed emissions during the 3rd quarter of April 2020 while the urban regions maintained reduced emissions for a longer period. Nonetheless, a gradual increase has been observed since April 16 due to relaxations in lockdown implementations. Restrictions on transportation in the cities resulted in an evident drop in the surface urban heat island (SUHI) effect, particularly in megacities. The changes reported as well as the analytical framework provides a baseline benchmark to assess the sectoral pollution contributions to air quality, especially in the scarcity of ground-based monitoring systems across the country.