The purpose of the study was to find out the effects of existing physical environment of chemistry lab on cognitive learning of chemistry students in the rural and urban schools of Rawalpindi Division at secondary school level. The population of the study consisted of all science teachers and science students of all male and female schools in Rawalpindi division. Through proportionate sampling technique, 300 science teachers and 400 science students of grade X were taken as sample. For collection of data, an achievement test with respect to cognitive abilities in the subject of chemistry was developed for four hundred students of grade X and a questionnaire with respect to lab facilities was developed for three hundred science teachers. Data were analyzed with the help of descriptive and inferential statistics i.e., percentage, mean and Z-test. Analysis of the study revealed that existing laboratories were substandard, and adequate physical facilities, equipment and consumable items were not available. Due to conduct of practicals, performance of urban students in the achievement test was better than the performance of rural students. The study revealed that laboratory environment had positive impact on cognitive learning.