The objective of the study is to investigate the combined impact of cash holding and corporate governance on the performance of non-financial firms. The sample consists of 30 Islamic-based firms from Karachi Meezan Index (KMI) 30 index and 42 non-Islamic firms from Karachi Stock Exchange (KSE) 100 index in Pakistan over the period of 2010–2014. The results show that corporate cash holding has negative and significant relationship with earnings per share and returns on assets (EPS and ROA), while it has a positive and statistically significant relationship with Tobin’s Q and market share price (TQ, MSP) in both KMI 30- and KSE 100-indexed firms. In addition, we find that the structure of corporate governance is poorly performed in KMI 30- and KSE 100-indexed firms. This poor governance structure leads to the firms dispelling cash quickly, which significantly reduces the performance of these firms. So the firms can increase their performance by establishing effective corporate governance structure.