Why do firms in some industries exhibit very similar debt ratios, while firms in other industries do not? This paper examines the dispersion in leverage ratios among firms within an industry, and relates this dispersion to industry characteristics. We find that more concentrated industries and industries where the use of leasing is more intense exhibit greater intra-industry dispersion. We also document greater dispersion in industries where firms use less incentive compensation, sit more insiders in their boards, are older, and have larger capital expenditures in relation to their assets.