Liaquatabad was named after Nawabzada Liaquat Ali Khan, the first Prime Minister of Pakistan.

[3] Liaquatabad, formerly known as Lalukhet because it was once the agricultural land along the Lyari River belonging to a man named Lalu.

[3] The land was purchased by Pakistan Public Works Department from Lalu to settle the Urdu speaking Muslim from India at the time of partition.

The Government planned an orderly settlement but the Muslim refugees started haphazard and arbitrary construction after delays.

There are several ethnic groups in Liaquatabad including Muhajirs, Sindhis, Kashmiris, Seraikis, Pakhtuns, Balochis, Memons, Bohras and Ismailis.