Keeping in view the importance of psychological adjustment in students’ academic achievement this research was conducted to assess the predictive power of psychological adjustment for students’ academic achievement. A total of 171 (85 male & 86 female) students between the ages of 17-35 years (M = 22.08, SD = 2.7) were recruited from Karakoram International University, Gilgit, Pakistan. The adult version of Personality Assessment Questionnaire along with the obtained marks in last semester of the students was recorded to assess their academic achievement. Results showed that students’ psychological adjustment was significantly related with their academic achievement. Hierarchical regression analysis indicated that only students’ negative self-adequacy, a subdomain of psychological adjustment, independently predicted their academic achievement. Additionally, gender differences were also found in emotional instability and academic achievement.