The general objective of this study was to examine the influence of capital structure on financial performance of firms listed at the Nairobi Securities Exchange (NSE). The specific objectives were, to establish the relationship between capital structure and firm's profitability, to determine structure on a firm's liquidity position and examine effects of capital growth in assets.The study employed a descriptive research design. The study was a census and focused on the 49 firms at the NSE that were operational in the period 2009 to 2013.Primary data was collected through questionnaires while secondary data was collected from financial statements and the NSE handbook. The data was processed and analyzed using statistical package for social science (SPSS) version 21. T-Test, Chi Square statistics and Pearson correlation were used for the analyses. Research findings were used to test research hypotheses and give recommendations on influence of Capital structure on financial performance of firms listed in the NSE. The results were presented in summary reports and tables.The study established that capital structure had a significant negative influence on the profitability and liquidity of a firm, and an insignificant relationship on a firm's growth in assets. The study made the following recommendations: 1) Capital structure of any firm should be well managed to ensure that a firm remains in operation and is able to give a reasonable returns to its shareholders, 2) Since profitability of a firm is dependent on proper management and composition of capital structure, capital mix should be a key agenda in all Annual General Meetings of companies, and 3) A firm should arrive at an optimal ratio of liquidity verses Capital to ensure that its able to meet short term liabilities as they fall due while at the same time catering for long term projects.