Various efforts have been made to know the key factors affecting student satisfaction. But very few attempts have been made to know the key determinants of instructors’ satisfaction particularly working in online environment. This study is an attempt in this regard as well as to explore the interacting effects of optimism on various hypothesized relationships. Through questionnaire survey 54 responses were collected from different instructors associated with elearning programme of Allama Iqbal Open University (AIOU). Results confirmed system quality, system usefulness and, student performance & satisfaction as significant predictors towards instructors’ satisfaction. The combined effect of system quality and instructors’ satisfaction towards instructor satisfaction was also substantiated. Discussions and implications are presented based on the findings of the study.