Using a corporatelevel dataset of Chinese private listed companies over the period of 20042008, this paper examines how ultimate controlling shareholder influence corporate capital structure. The results show that: debt financing expand the ultimate shareholder’s control of the resources which facilitate the expropriation behaviors, and will not lead to dilution of controlling rights, the separation of voting rights and cash flow rights positively related to capital structure significantly. High cash flow rights can effectively restrain the ultimate shareholder’s behaviors of expanding debt financing to gain private benefits. The ultimate shareholder’s cash flow right has a significantly moderate effect on the relationship between the divergence and capital structure. Relative to nonstate owned firms, state ultimate shareholders’ motivation of expanding debt financing to pursue private benefits is relatively weak, and the positive impact of the divergence between state controlled shareholders’ controlling rights and cash flow rights on capital structure is also relatively small.