Islam is a complete code of life. There are five true sources that serve to derive Islamic law and jurisprudence to regulate the vital life chores of world. These Islamic sources include Quraan, Hadith, Ijtehad (Progressive reasoning), Ijma (consensus) and Qiyas (analogy). Among these Quran and Hadith find the supreme authority. Hadith further explains the sayings and acts of Hazrat Muhamad (peeace be upon him) that are greatly vital to address the various issues rising from various orientations of day to day life. Amidst all the fields of Hadith, the interpretation of Hadith is the most crucial. A great attention and care is exercised in this regard because it can either annihilate the real meaning or can comprehend it to its upright status. In this article, fully focused study is undertaken to explain the importance of Hadith science and its functions in human society. Examples from the text and related arguments have been presented to clear the understanding of the common reader.