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This paper analyzes the explanatory power of some of the recent theories of optimal capital structure. In this paper, an attempt has been made to examine the determinants of capital structure –age of firm, size of firm, asset structure (tangibility and liquidity), business risk, growth rate, earning rate (ROA), non tax shield as independent variables and degree of operating leverage-of the industrial companies listed to Amman Stock Exchange from the period 2004-2007. The results of this study have delivered some insights on the capital structure of Jordanian industrial firms. The issue of capital structure is an important strategic financing decision that firms have to make. It is therefore important for policy to be directed at improving the information environment. The simple and multiple regression test used to analysis the determines of capital structure independent variables and leverage, the multiple regression test results indicate from the period 2004 to 2007, and there is a positive significant relationship between the firm size, asset structure/ tangibility, growth rate, and non tax shield and the degree of leverage at different sign level 1% and 5%. But there is a negative significant relationship between earning rate (ROA) and leverage at sign level 5%. Also the model is significant as overall variables independent variables and leverage at highly significant at level 1%. Finally, the results show there is no significant relationship between the number of age firm, assets structure / liability and business risk as independent variables and degree of leverage. The study provides useful recommendations for policy direction and management of these firms through emphasis on the facilitation of equity capital since it provides a base for further borrowing, reduces businesses’ sensitivity to economic cycles. There could also be policies intended to encourage establishing financing schemes to assist firms in specific industries. There is a need to develop validated databases as more data becomes available in future. Using such databases can help examining and identifying additional variables that could influence the financing behavior of Jordanian companies. Finally, focus should be placed on the ownership structure of Jordanian companies to examine how firms make their financing decisions.