This goal of this study is to enhance the already prevailing literature on debt and firm performance relationship by concentrating on the role of ownership structure in this relationship. The study used performance measures (Return on Assets and Earnings per share) as dependent variables. The study includes control variables; age, size and sales growth. The study also examined the role of macro-economic variables (Rate of inflation and GDP growth rate) on performance of the firms. The study used data of 148 firms from non-financial sector listed on the Pakistan Stock Exchange for the period 2012 to 2019 and fixed effects model for estimation. The results indicated that the impact of long term debt, short term debt and total debt on firm performance is significantly negative except with LTD in EPS models it is insignificant. The control variables revealed that; size is significantly positive in all models, sales growth is significantly positive in ROA models while it is insignificantly positive in EPS models, age is significantly negative in ROA models and in all of the models of EPS it is insignificantly negative. The macroeconomic variables; GDP growth rate is negative and insignificant in ROA models and it is positive and insignificant in EPS models. Rate of inflation is negative and insignificant in ROA with LTD and TD, except with STD it is positive and insignificant. Inflation rate in all EPS models is positive and insignificant. The impact of ownership structure as an interaction term varies across all models; family ownership is positive and significant with STD and TD in ROA models while in EPS models it is positive and insignificant. State ownership is positive and insignificant in both ROA and EPS models, except in EPS model with STD it is negatively insignificant. Individual’s ownership is negative and insignificant in ROA model with LTD and in all EPS models, while positive and insignificant with STD and TD in ROA models. Foreign ownership is negative and insignificant with LTD and STD and negatively significant with TD in ROA models, while it is negative and insignificant with LTD and TD and positively insignificant in EPS models. Institutional ownership is significant and negative with LTD and TD, and negatively insignificant with STD in ROA models. While in EPS models institutional ownership is positive and insignificant with LTD, and negatively insignificant with STD and TD. Supervisor:- Dr. Farhat Mahmood Co-Supervisor:- Dr. Abdul Rashid