Dozens of people reportedly gathered to watch the punishment meted out in the district of Orakzai, part of Pakistan's semi-autonomous tribal belt on the Afghan border that Washington has branded the global headquarters of al Qaeda.
Abdul Khaliq, 31, had his right hand sliced off at the wrist on Monday after a Taliban court found him guilty of stealing from a shop on December 23, residents said.
Taliban used the public address system of a mosque to invite residents to watch. Khaliq was brought out blindfolded to an intersection, his right hand placed on a wooden block and then chopped off, an intelligence official said.
Residents said he was taken to a local dispensary to have his wound bandaged.
The incident took place in Mamozai town, which lies outside government control, a local administration official in the neighbouring town of Hangu told AFP on condition of anonymity.
Another intelligence official said the Taliban stepped in following a formal complaint from a shopkeeper.
Khaliq, who is a father of two, has since left the village, residents said.
The Taliban have carved out sanctuaries in the Pakistan's semi-autonomous northwest tribal belt from where they are fanning the war in neighbouring Afghanistan.
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