Capital structure decisions have important implications on the value of the firm, as the components ofthe capital determine the cost of capital. The guiding principle is to choose the capital structure thatmaximizes the value of the firm. The objective of this study is to find out the determinants of capital structure of Oman corporate. Thisstudy is based on the financial data collected from the balance sheets and income statements of allcompanies listed in the Muscat Securities Market excluding banks, financial institutions and insurancecompanies. The sample includes 82 firms. The period of study is six years from 2006 to 2011. This study implies that in the context of lower profitability of firms, the firms tend to use moreleverage as a means of sourcing finance. The study also finds that the decision to increase leverage is afunction of efficiency of utilization of assets. Higher the efficiency in asset turnovers more is thetendency to use leverage. Another implication of the study is that leverage is a function of size. Companies which increase their revenues tend to be become debt intensive.