This paper examines that the impact of firm-specific characteristic on firm capital structure in Chinese-listed companies and attempts to solve a few puzzles existing in previous related studies. The key factors include state ownership, institutional ownership, and the risk of default. From the analyses of all samples, our results confirm that the expected default risk is important in explaining debt decision, but the influence of ownership structure is not significant. However, after separating high- and low-level from the firm leverage we find that the ownerships of state and institutions have a positive effect on corporate leverage in high-leveraged companies but not in low-leveraged firms. In addition, the positive impacts of external governance commonly occur in large firms. The observed findings provide some important implications for the role of external governance in Chinese-listed companies.