The air-launched cruise missile, which can carry a nuclear or a conventional warhead, was tested at an undisclosed location.
The Inter-Services Public Relations (ISPR) said the test was successful.
"This missile system has enabled Pakistan to achieve a greater strategic stand-off capability on land and at sea," said a statement issued by the ISPR.
"The missile test was conducted as part of the continuous process of improving the technical parameters of the weapon system," it said.
The Ra`ad missile, which was first tested in August 2007, was developed exclusively for launch from combat aircraft.
The Ra`ad, meaning thunder in Arabic, has stealth capabilities and is a "low-altitude, terrain hugging missile with high manoeuvrability" that can "deliver nuclear and conventional warheads with great pin-point accuracy".
The launch was appreciated by President Asif Ali Zardari, Prime Minister Yousuf Raza Gilani and the Joint Chiefs of Staff Committee Chairman, who congratulated scientists and engineers on their achievement.