Aim of the study was to find out the relationship between anxiety with academic performance of undergraduate university students. The study was conducted for the objectives; (i) to find out the anxiety level of undergraduate university students. (ii) to identify the level of achievement scores (GPA) and co-curricular activities of undergraduate university students, and (iii) to find out the relationship between anxiety and academic performance of undergraduate university students. A sample of 408, including 195 male and 213 female 2nd-semester undergraduate BS students from 12 different departments out of 4 faculties of the University of the Sargodha, taking 34 students from each department, were selected through multistage random sampling techniques. Two instruments, anxiety scale and performance checklists, were developed to collect data from students. Research instruments were validated through experts' opinions, pilot testing was done, and the reliability coefficient Cronbach Alpha value for the anxiety scale was .832. Frequencies, mean, standard deviation, t-tests and Pearson correlation were used for data analysis. There was a weak and negative relationship between anxiety and achievement scores of undergraduate university students whereas. But there was a significant but weak and negative relationship between anxiety and achievement scores and co-curricular activities of undergraduate university students. So it is recommended that teachers of the university may integrate activities in their classroom teaching to keep students involved and reduce anxiety.