The January 20 flight to Madina carried 416 passengers, seven more than its capacity of 409 including jump seats, in a serious breach of air safety regulations.
PIA spokesperson Danyal Gilani said media reports that some passengers travelled standing "are exaggerated and baseless. It is not possible for anyone to travel like that in an aircraft, regardless of the duration of the flight."
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But he said: "The matter pertaining to the travel of more passengers than the booked load...is under investigation," and the airline had ordered a "thorough probe into it, and all concerned are being questioned".
"PIA is committed to ensure the safety of the passengers and cannot allow any incident to happen which compromises safety," he added.
It was the latest embarrassing incident for the national flag carrier, considered a global leader until the 1970s but plagued by controversies over recent years and saddled with billions of dollars of debt.
A PIA turboprop built by European manufacturer ATR plummeted into a mountain in a northern region on December 7, bursting into flames and killing all 47 people on board.
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The airline was later mocked after its staff were photographed sacrificing a goat on a runway to ward off bad luck.
Domestic flights are often delayed for VIPs while flight employees have been caught smuggling goods ranging from iPhones to narcotics.
In 2013 one of its pilots was jailed for nine months in Britain for being drunk before he was due to fly from Leeds to Islamabad with 156 people on board.
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