The present study analyzes the relationship between ownership and leverage levels of a sample of 465 non-financial Australian firms for the period 2004-10. Blockholders in Australia have a significant positive influence on the capital structure but, as their shareholding levels rise, their influence on leverage becomes negative. Managerial ownership, on the other hand, has no influence on the capital structure, but is found to have a significant impact on the short-term debt levels. The relationship between ownership and leverage is bidirectional as both ordinary least squares (OLS) and panel data analyses show significant positive relationships between blockholder ownership and capital structure.