Abstract: The main purpose of the study was to examine the effect of capital structure on financial performance of listed telecommunications sector firms at the Nairobi securities exchange, Kenya based on two specific objectives namely; to assess the effect of equity financing on financial performance of listed telecommunication sector firms at the Nairobi securities exchange, Kenya and to determine the effect of asset tangibility on financial performance at the Nairobi securities exchange, Kenya. The study was anchored on the pecking order theory and agency theory respectively.