PurposeThis research examined the effect of information literacy (IL) on academic engagement (AE), cognitive engagement (CE) and academic performance among business students in Pakistan.Design/methodology/approachA cross-sectional survey was conducted to collect data from business students, recruited through a proportionate stratified convenient sampling technique, of the top 13 business institutions in Pakistan. The questionnaire was personally administered by visiting each institution with permission for data collection. A total of 554 responses were received and analyzed using the partial least squire-structural equation modeling approach.FindingsThe results exhibited that these business students perceived themselves as information literate. Furthermore, IL of business students appeared to predict positively their AE, CE and academic performance.Research limitations/implicationsThese results provided empirical and pragmatic insights for business educators, business librarians and accreditation bodies about IL effectiveness in academia. These findings may also inform policy and practice for IL instruction programs being carried out in business-related educational institutions not only in Pakistan but also in other countries of South Asia as they share similar characteristics.Originality/valueThis research would be a great contribution to the existing literature on IL, especially in the academic context as the interrelationship between IL, AE, CE and academic performance has not been investigated so far.