Pakistan faced severe challenges of violent extremism and terrorism after US invasion of Afghanistan. The successive governments pursued both political and military means to bring an end to this problem but to no avail. The war against terrorism was highly unpopular among the people and it was the main cause of failure to combat terrorism. In 2013, the newly formed government led by Prime Minister Nawaz Sharif decided to give peace a chance after a decision of an All Parties Conference (APC). Consequently, the dialogue process, through the committee members nominated by the government and Tehreek-e-Taliban Pakistan (TTP), ensued that kindled the hope of peace and stability in the country. However, the process was crippled after a few months and government launched a military operation against TTP and other militant outfits in the country. The paper explores the factors that lead the government to start peace talks with TTP and analyzes the challenges that dialogue process faced and ultimately caused its failure. Finally, it highlights the benefits, particularly the national consensus to combat terrorism that dialogue process produced despite its failure to bring peace in the country.