This thesis analyses the determinants of firms' capital structure, debt-equity ratio, in Thailand. Data are from the balance sheet of 282 listed firms in the stock exchange of Thailand, excluding firms in financial sector. We use Linear Structural Relation or Linear Structural Equation Model (LISREL) to estimate relationships models. We find that tax, investment inefficiency, firms size and profitablility cannot statistically explain capital structure. We find that the financial distress variable with the coefficient of 0.50 has statistically positive effect on capital structure. This result contradics to our hypothesis, and might imply that Thailand market may be relatively small and suffer from imperfect information to attract investors. We suggest that Thailand should improve capital market for increase equity financing opportunities.