<p><strong>Background and Objective:</strong> It is important to understand the proximity of the inferior alveolar nerve canal (IANC) and lower third molar before performing any surgical procedure. The aim of the study was to determine the proximity of the IANC to the lower third molar and the pattern of impaction among the population of Punjab, Pakistan.<br /><strong>Methods:</strong> This cross-sectional observational study was conducted from December, 2021 to November, 2022 in the Maxillofacial Surgery departments of four private dental institutes in Punjab. A total of 134 patients were recruited. The IANC proximity and impaction pattern of the lower third molars of both sides were assessed using cone beam computed tomography images. Statistical Package for Social Sciences was used for analysis and a p-value less than or equal to 0.05 was set as significant.<br /><strong>Results:</strong> There were 76 (56.7%) males and 58 (43.3%) females, with the majority belonging to the age range from 40 to 59 years. The mean proximity of IANC to the impacted third molar was 1.87 + 2.33 mm. Sixty-seven participants had IANC in close proximity (less than 1 mm) to the impacted third molar. IANC was positioned apically with the least proximity to the impacted third molar in 56% of the participants. Moreover, 20 (4.9%) impacted third molars, affecting mostly females, were in direct contact with the canal. Most of the impacted third molars were in vertical position [89 (66.4%)] followed by mesioangular [22 (16.4%)] and horizontal [21(15.7%)] positions, respectively.<br /><strong>Conclusion:</strong> Most of the patients with impacted third molars had IANC in close proximity (less than 1 mm) to the impacted tooth with a possible risk for nerve injury during surgical extraction making it imperative to assess the position of the IANC before performing dental procedures.</p>