This study aimed to test the effect of managerial ownership and financial leverage on investment efficiency in Egyptian Listed Companies, where managerial ownership measured by the percentage of shares owned by management, and financial leverage (debt) was measured through the ratio of total liabilities to total assets. Investment efficiency was also measured through the absolute value of the residuals obtained from the investment prediction model, which represent a deviation from the optimal level of investment (as an inverse measure of investment efficiency). Four control variables were also used: (capital density, return on assets, size and operating cash flows), the study relied on a sample of by 63 Egyptian Listed Companies between 2015 and 2021, which belong to twelve non-financial sectors, and by applying the multiple regression method, the study concluded: There is a significant negative relationship between managerial ownership and investment efficiency, meaning that the higher the percentage of shares owned by managers, the lower the company’s investment efficiency. This result is consistent with the hypothesis of managerial entrenchment, which indicates that as the percentage of managerial ownership increases, managers’ motivations to tighten control over the company and achieve personal benefits increase, which It reduces the investment efficiency of companies. Also, there was a non-significant negative relationship between financial leverage and investment efficiency, and there was a positive effect of the relationship between managerial ownership and financial leverage on investment efficiency, Which can be explained by that leverage limit the opportunistic motivations of managers when increasing managerial ownership, which reflects positively on investment efficiency. These results confirm the importance of the combined effect of managerial ownership and financial leverage on improving the investment efficiency of companies.