Making his first-class debut at the age of 17, Alam played with Pakistan Customs and Karachi. He impressed enough to be selected to play in the U-19 World Cup, which Pakistan won.

Alam starred in the 2006–07 domestic season, finishing as the fifth highest run scorer in the Quaid-e-Azam trophy. He took a 5 wicket haul in the Twenty20 Cup final which earned him Man of the Match and was also named Man of the Series, Best Batsman and Best Bowler.

After Pakistan's disappointing World Cup campaign, Alam was drafted into a 16-man squad for a One Day International series against Sri Lanka in Abu Dhabi. His debut in the 3rd ODI was one to forget, he was caught and bowled by Dilhara Fernando for a first ball duck.

His second One-day International was a better experience, as he contributed 32 unbeaten runs down the order as Pakistan beat India by 31 runs in Jaipur.

In between those two matches, he travelled to South Africa as part of Pakistan's squad for the 2007 ICC World Twenty20 tournament. He played in the semi-final, taking two wickets against New Zealand, one a superb caught and bowled effort to dismiss Lou Vincent, as Pakistan progressed to the final, for which he was not selected. In Asia Cricket Cup in June 2008, he scored his maiden half century against Hong Kong. In that match, Pakistan's top order was ripped by Hong Kong bowlers before Fawad and another team mate Sohail Tanvir set up a 100 runs partnership for the 8th wicket. Sohail ended at 59 while Fawad Alam remained unbeaten at 63*. However, he was unexpectedly dropped for the Sri Lanka series in January 2009.

In October 2008, he was selected for the quadrangular Twenty20 International tournament to be played in Canada between Sri Lanka, Pakistan, Zimbabwe and hosts Canada In the 4th match of the tournament, he hit 23* from just 8 balls with 3 sixes and supported the captain Shoaib Malik and guided the team to an exclusive victory by the margin of 3 wickets. In that match, he also got the wicket of SHT K