And the public, though initially nervous, now can't get enough of it.
Born a year ago, amid massive anti-government street protests, Khabaristan is inspired by satirical US news website The Onion and American comedian Jon Stewart, who retired last week after 15 years hosting the caustic "Daily Show".
"You want to change something you have to criticise yourself, your own country, your own leaders," said Kunwar Khuldune Shahid, one of the founders of the Khabaristan Times.
One piece, headlined "Pakistan will not tolerate any non-US drone", mocks what most believe is the government's position on America's drone strikes against the Taliban and other Islamist rebels, denouncing them in public while secretly supporting them.
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Another joke article said the country's Inter-Services Intelligence agency had found that most Islamic State fighters were uncircumcised, "proving" the Middle Eastern militant group were not Muslims, but backed by the West -- a common conspiracy theory in Pakistan.
The piece was about the head of one of the country's main Islamist parties, Fazlur Rehman, calling for military intervention against women in jeans, dubbing them Pakistan's "worst enemy".
The "news" went viral, to the surprise of the staff of the Khabaristan Times.
Westerners "were commenting on the page: 'we can't tell this is satire because it didn't say it was.' They thought everything was true!" said Luavut Zahid, Kunwar's co-founder.
"Jon Stewart! I cried (during the last episode)," she said.
"He is so good, it's impossible not to be influenced by that guy."
"Unless you follow (current affairs) on a daily basis, you won't get most of what Jon Stewart is saying or you don't get most of what we are publishing," added Kunwar.