Using the data of China’s 2010 listed companies, this paper studies the role of the second largest shareholding on companies’ overinvestment from the perspective of second largest shareholder, it is found that under the absolute holding ownership structure, the second largest shareholder can’t play an effective supervision role on the investment behavior of controlling shareholder; when second largest shareholder is institutional investors, they can’t slowdown the overinvestment phenomenon; at the same time, we divided the debt into grades and found that second largest shareholder can’t slowdown companies’ overinvestment behavior at high debt ratio group, while they would boost overinvestment at low debt ratio group. This paper shows that second largest shareholder can’t slowdown companies’ overinvestment, and the governance role of the second largest shareholders is not working.