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The study aims to test the impact of leverage on financial performance by taking evidence from local industries of Pakistan. The hypothesis suggests an existence of impact of leverage on financial performance. The impact of size or market capitalization, growth and nature of industry on financial performance is also assumed by the research as control variables along with leverage.The data employs all the public limited companies listed on KSE (Karachi stock exchange) from 22 different industrial sectors of Pakistan including Textile, Cement, Fuel and Energy sector, transport and communication, tobacco, chemical & pharmaceutical, engineering, automobile and miscellaneous sectors. The statistical results prove a significant impact of leverage on financial performance and alternate hypothesis is accepted.Methodology, detail of variables, theoretical framework, hypothesis and sources of data are illustrated while Statistical analysis is done by using descriptive statistics, and regression analysis tools. The findings and discussion on results is demonstrated in detail at the end of the study. The issues for further research are also highlighted in the study.