Capital structure is one of the most important areas of financial decision making. In this study we attempt to examine capital structure and its impact on financial performance of selected Indian Steel Companies during the year 2015 and 2016. Correlation, ANOVA and multiple regression models are used to analyze the data for the study. Firstly, we computed Gross Profit Margin (GPM), Net Profit Margin (NPM) and Return on Capital Employed (ROCE) as an indicator of financial performance (dependent variables) and Debt Equity Ratio (DER), Interest Coverage Ratio (ICR) and Debt Assets Ratio (DAR) as measures of capital structure (independent variables). The result of multiple regression and ANOVA indicated that there is a significant impact of capital structure on financial performance of Indian Steel Industry. Correlation results confirmed that there is negative relationship between Capital Structure and financial performance. The result of the study serves as a guide to creditors, management, financial institutions and other users to take better investment, financing and capital decisions.