Capital structure decisions given their effect on financial performance are among the key issues that require great analysis in financial management by entities if they are to achieve their targeted goals. This study employed a data collection sheet and documentary review guide which were used to guide the researcher collect secondary data from the annual financial reports of the listed firms on the East Africa securities exchanges: Nairobi (NSE), Dar es Salaam (DSE), Uganda (USE), and Rwanda (RSE)). The study covered the period between 2012 to 2016 where a total of one hundred and thirteen (113) firms were listed in East Africa that is NSE (64), DSE (26), USE (16), and RSE (7). The data was analyzed using descriptive statistics, correlation analysis, simple linear regression and multiple regression analysis; aided by Statistical Package for Social Science (SPSS 22.0) software. It was found out that capital structure in listed firms in East Africa has a negative correlation and statistically low significance influence on East African listed firms’ financial performance, which suggest that an increase in debt financing [short term debt rates (STDR), long term debt rates (LTDR), and total debt rates (TDR)] results into a decrease in corporate financial performance (Returns on Assets (ROA) and Returns on equity (ROE)]. It was also evident that on average profitable listed firms in East Africa preferred to use internal source of financing in their capital structure as compared to external source of financing like debts. In conclusion, increase in debt financing affects negatively the performance of listed firms in East Africa. It is therefore recommended that listed firms should use more of equity financing such as retained earnings if they are to achieve good financial performance.