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Most of the people in Pakistan perceive distance learning as of poor quality. Therefore, the researchers conducted this study to find out whether it's only people's perception or is there anything in reality, concerning the poor performance of the distance learning students compared to traditional students. Consistent with this rationale, the main purpose of this study was to examine the relationship between student satisfaction and the following variables of the distance learning environment: Instructors' performance, course evaluation, and student-instructor interaction. The sample consisted of 245 students of Allama Iqbal Open University of Pakistan. Keeping in view the nature of relationships among the variables, correlation matrix and regression analysis in addition to frequency analysis were used to analyze the findings. The results showed that just like in traditional education, in distance learning at AIOU, enough interaction takes place between students and instructors; courses are up to date and well-designed; instructors are devoted, motivated, and equipped with the required competencies. Moreover, the faculty at AIOU is delivering distance courses that meet students' needs with regard to student-instructor interaction, instructor performance, and course evaluation.