AbstractThe study aims to test the effect of institutional ownership structure andcorporate governance on earnings management. Institutional ownership is measured by using the percentage of stock ownership by financial institutional investors and corporate governance is measured using the four proxies (proportion of independent commissioners, board size, the existence of an audit committee, company size). The method of analysis used is multiple regression. The study used data from the Indonesia Stock Exchange with a sample of 20 banking companies for the period 2004-2006. Results showed that all variables are institutional ownership, the proportion of independent commissioners, board size, the existence of an audit committee, company size has no effect on earnings management. Large influence of institutional ownership, the proportion of independent commissioners, board size, the existence of an audit committee, firm size on earnings management in manufacturing companies in Indonesia Stock Exchange was 14.3 percent while the rest 85.7 percent are influenced other variables outside research or outside the model equations regression Keywords: earnings management, institutional ownership, corporate governanceAbstrakPenelitian bertujuan untuk menguji pengaruh struktur kepemilikan institusional dan corporate governance terhadap manajemen laba. Kepemilikan institusional diukur dengan menggunakan persentase kepemilikan saham perusahaan oleh investor institusi keuangan dan corporate governance diukur menggunakan empat proksi (Proporsi dewan komisaris independen, ukuran dewan komisaris, keberadaan komite audit, ukuran perusahaan). Metode analisis yang digunakan adalah regresi berganda. Penelitian menggunakan data dari Bursa Efek Indonesia dengan sampel sebanyak 20 perusahaan perbankan untuk periode tahun 2004-2006. Hasil penelitian menunjukkan bahwa semua variabel yaitu kepemilikan institusional, proporsi dewan komisaris independen, ukuran dewan komisaris, keberadaan komite audit, ukuran perusahaan tidak berpengaruh terhadap manajemen laba. Besar pengaruh kepemilikan institusional, proporsi dewan komisaris independen, ukuran dewan komisaris, keberadaan komite audit, ukuran perusahaan terhadap manajemen laba pada perusahaan manufaktur di Bursa Efek Indonesia adalah 14,3 persen sedang sisanya 85,7 persen dipengaruhi variabel lain diluar model persamaan regresiKata kunci: manajemen laba, kepemilikan institusional, corporate governance