The flag flying over the embassy was switched to the red, black and green banner from independence in 1951.
Pakistan has not yet shown any reaction to the developments in Libya. The rebels' flag was raised at a ceremony at the diplomatic mission compound.
Local journalists were invited to witness the occasion. The Libyan ambassador said that the UN and many countries have supported change in Libya.
The embassy also removed photographs of Colonel Gaddafi and other symbols of the Gaddafi government defaced in support of the Transitional National Council.