The study empirically examines the impact of dividend policy and corporate governance on firm financial performance among the textile firms listed at Pakistan stock exchange from period 2009 to 2018. Panel data is extracted from financial reports of 40 firms sample based on dividend paying companies. The study finds that dividend pay-out ratio has insignificant relation with firm performance while board independence, audit committee size and audit meeting has significant effect on performance of the firm. Board size and board meeting show insignificant results. Dividend pay-out and firm performance show negative association which describes that the dividend behaviour of textile firms is inconsistent. This sector need to reinvest them retain earnings for the purpose of capital gain. The result of our study suggests that good governance mechanism create goodwill and improve the financial performance of the firm. While corporate governance indicator shows that excellence governance helps to maintain investor confidence in financial market area under study. Supervisor:- Dr. Saud Ahmed Khan