The research investigates how credit risk affects Islamic bank profitability in Pakistan while studying the influence of Sharia governance. Islamic banks manage credit risk differently from traditional banks because they follow Shariah principles that base their operations on profit-and-loss sharing while banning riba interest transactions. This research analyzes NPL effects on bank profitability (ROA) by studying five full-fledged Islamic banks from 2014 to 2023 using Multiple regression analysis. The study demonstrates that Sharia governance through Sharia Board Size and frequency of Sharia Board Meetings functions as a key moderator that enhances the link between credit risk and profitability. Such institutions demonstrate better financial performance because their solid governance systems help them convert their risk exposures into prosperity. Research findings demonstrate that larger bank institutions generate lower profitability because they encounter operational inefficiencies and scale-related operational challenges.