Existing empirical research on capital structure choice has been largely confined to the U.S. and a few other advanced economies. This study attempts to extend knowledge of corporate capital structure and its determinants in a less-developed economy namely, Iranian capital market. It utilizes accounting information for a sample of 158 listed Iranian non financial firms for the period 1998 through 2002. The primary objective of this study was to establish whether corporate capital structure in Iranian listed companies is related to factors similar to those appearing to influence the capital structure of U.S. and other developed countries’ firms. Results obtained here although inconsistent with central predictions of pecking order theory and asymmetric information hypothesis of financing choices but suggest that the optimal capital structure choice may be explained by three key factors such as tangibility, firm size and profitability. However, although results provide varying degrees of support for the static trade-off theory of capital structure choice, but anecdotal evidence suggest that Iranian listed companies practice pecking order behavior in reality.