This study examined the impact of aflatoxin contamination on rice, a widely consumed staple food. Various forms and types of rice from three regions in Pakistan between 2019 and 2022 were investigated for their relationship with processing, infestation severity and physicochemical characteristics. Semi-polished rice displayed the highest aflatoxin levels employing significant variability, while parboiled rice was also found to be contaminated. Nearly 22% of polished rice samples and 3% of brown rice samples exceeded the EU limit. Non-basmati rice varieties, particularly IRRI-6 (47.3 μg/kg), showed twice as much contamination as basmati rice. The coastal Zone-IV exhibiting significantly higher aflatoxin levels (avg. 14.40 µg/kg). Environmental conditions played a significant role, with moisture in brown rice and protein in parboiled rice exhibiting positive and negative correlations (p < 0.01) with aflatoxin levels, respectively. Principal Component Analysis (PCA) indicated that semi-finished and non-basmati rice were more associated with non-compliant rice. The first principal component, explaining 57.8% of variance, was positively loaded with aflatoxin, moisture, and insect infestation, while negatively loaded with protein, amylose, ash, immature, chalky, and foreign matter. These findings are insightful for local and international stakeholders for mitigating aflatoxin contamination in rice.