The gunmen intercepted Brig Tahir Masood's car at Sihala town on the outskirts of Islamabad shortly after he left his home within the Defence Housing Authority.
His driver, also a retired army soldier, was shot by the kidnappers when he resisted. The abductors took Masood away to an unknown location.
At least four men were involved in the kidnapping, police officials said.
Masood was serving on contract with the ISI following his retirement, media reports said.
No group claimed responsibility for the abduction.
There was no official word on the incident.
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