In finance literature capital structure received considerable attention as factor affecting the profitability of firms. The aim of this paper is to contributes to literature on this factor (Capital structure) and evaluate its impact and nature of relationship with the profitability of Automobile companies listed in Karachi stock exchange.19 companies were selected as sample. Data is extracted from the publications of the relevant companies and website of stat bank of Pakistan from 2006-2012.Regression analysis and correlation test is used with the help of statistical package SPSS in order to predict the result. Study concludes that capital structure (Debt/Equity) is negatively associated with the profitability, which implies that an increase in debt capital caused a decrease in the profitability of the firms and vice versa. These results are supportive for the business companies during the financing of capital.