Jamshed Dasti alleged in the lower house that the Parliament Lodges, a block of flats that houses scores of MPs, were frequented by "women of ill-repute".
He further alleged alcohol and cannabis were used in the flats located near parliament, and the air around them always carries the stench of banned drugs.
Only non-Muslims can purchase and drink alcohol under Pakistani laws.
Naeema Kashore, who was chairing the session in the absence of the Speaker, switched off Dasti's microphone and asked him to provide proof to back up his claims.
"I have video evidence and will hand over the same to the Speaker of the National Assembly to take action," Dasti told reporters.
He claimed 'mujras' or dance parties were held in the Parliament Lodges. He alleged parliamentarians living in the lodges spend four to five crore rupees on alcohol every year.
Dasti, who hails from Punjab, challenged all parliamentarians to undergo a medical checkup to prove him wrong. He was supported by several lawmakers.
Nabeel Gabool, a lawmaker of the Muttahida Qaumi Movement, said Dasti's remarks were based on facts.
However, Pakistan People's Party parliamentarian Mola Baksh Chandio, who lives in the Lodges, said he had never heard anything like the allegations made by Dasti. He added that humans could make mistakes.
Dasti was elected as an independent member from Muzaffargarh district in southern Punjab in last year's general election.
In 2008, he was elected on a PPP ticket but later left the party, saying it was controlled by feudals and industrialists.
A self-styled voice of the underdog, Dasti is considered the poorest lawmaker in a parliament dominated by the elite. Dasti does not own a house or a car and travels with commoners in public transport vehicles.
In his annual income returns submitted to the Election Commission, Dasti said he has only a bank account where his salary as a parliamentarian is deposited, and this is his sole source of income.
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