The surface-to-surface missile has a range of 450km on Saturday, the Pakistani military said.
There was no immediate comment about the launch from India, which blames Pakistan for the April 22 gun massacre in the resort town of Pahalgam, a charge Pakistan denies.
Pakistan's military said the launch of the Abdali Weapon System was aimed at ensuring the "operational readiness of troops and validating key technical parameters", including the missile's advanced navigation system and enhanced manoeuvrability features.
President Asif Ali Zardari and Prime Minister Shehbaz Sharif congratulated those behind the successful test.
Missiles are not fired toward the border area with India; they are usually fired into the Arabian Sea or the deserts of southwest Balochistan province.
Islamabad-based security analyst Syed Muhammad Ali said Saturday's missile was named after a prominent Muslim conqueror of India, underlining its symbolic significance.
"The timing of this launch is critical in the current geopolitical context," Ali told The Associated Press.
He said the test was intended as a strategic signal to India after it had threatened to suspend a crucial water-sharing treaty.
India's navy said on April 27 that its vessels had successfully undertaken anti-ship firings to "revalidate and demonstrate readiness of platforms, systems and crew for long-range precision offensive strike."
Information Minister Attaullah Tarar said days before that Pakistan had "credible intelligence" of India planning to attack it within days.
Kashmir is split between India and Pakistan and claimed by both in its entirety.
They have fought two of their three wars over the stunning Himalayan region and their ties have been shaped by conflict, aggressive diplomacy and mutual suspicion, mostly due to their competing claims over Kashmir.
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