Powers given to the military risk misuse in the face of ongoing large-scale political protests, the US-based body said.
"Pakistan faces very real threats of terrorism, but giving unbridled powers to the army and suspending fundamental rights is the wrong response," said Brad Adams at Human Rights Watch.
"Suspending rights and judicial oversight is a disproportionate measure that should be rescinded."
On Aug 1, the government invoked article 245 of the constitution, permitting the military to carry out law enforcement in Islamabad.
Under article 245, the government also suspended fundamental rights, including the courts' jurisdiction to enforce freedoms of expression, assembly and association, and habeas corpus, allowing detention without charge or remedy.
Invoking article 245 also gives the armed forces excessive powers under the Anti-Terrorism Act of 1997, Human Rights Watch said.
Soldiers are permitted to shoot to kill after giving a warning, but are not bound by standard rules allowing them to act only in self-defence or to protect the lives or property of others.
Soldiers can conduct arrests and searches of property without a warrant.