The Messenger of ALLAH Almighty, the Holy Prophet MUHAMMAD (peace be upon him) has said "Ar-Rashi Wal Murtashi Kila huma Finnar" that mean "the giver and taker of bribes (corrupt) will both go to the fire of hell". This research analyzes corruption's effect on existing social values in Peshawar region of Islamic Republic of Pakistan. A total of 150 respondents were selected as sample using stratified random sampling technique for study using Likert scale as measurement tool in interview schedule. The bi-variate and uni-variate analyses were made for reaching results. The existence of the effect of "corruption perception" as independent variable's effects were assessed on the "social values in political institutions" as dependent variable by applying Chi-square test. Furthermore, Gamma (y) statistics' application was made for finding the bond and relationship's direction. It was concluded that a significant association prevails regarding corruption perception with organized corruption alliance between government servants and politicians (P=0.002), politicians who are corrupt do safeguard corrupt interests (P=0.000) and favoured political environment (P=0.000). Moreover, posting candid politicians on significant government posts (P=0.000), removing political influence form bureaucracy (P=0.000), making politicians accountable to agencies related to stopping corruption (P=0.000), recompensing politicians of honesty (P=0.033), sensitizing politicians to be aware of corruption (P=0.000) and applying court's judgements regarding reducing corruption (P=0.000) were found significantly associated with improving state of corruption.