The existence of water in the layers of hot mix asphalt (HMA) concrete pavement can lead to weakening of bonds between bitumen and aggregates, and cause moisture damage. In the last few decades, various research has been carried out on the specific subject of moisture damage and permeability; however, only limited work has been carried out to study the relationship of air voids with permeability and durability in HMA. The key objective of this research was to study whether such a relationship exists. This was determined by using locally available materials and the most common gradation used in Pakistan. Laboratory permeability tests were conducted on the prepared slabs while an indirect tensile strength ratio (TSR) test of the prepared samples was performed in the laboratory, which was used as moisture damage potential parameter against various air void levels. AASHTO T-283 test procedure showed a drop in TSR value while EN 12697-40 (80-B0093) test method showed an increase in permeability value with increase of air voids indicating that moisture damage followed. This research concludes that moisture damage is linked to the permeability of HMA and defines 6 % air voids as the threshold for National Highway Authority (NHA), Pakistan Class ‘A’ gradation. The outcomes of this research can be applied as benchmark values of the hydraulic conductivity (permeability) and durability of asphalt mixtures used in highway pavement construction.