The development in corporate governance and the practice play important role in developing and enhancing the global economy, business firms and improving financial stability of deposit money banks. The rising of non-performing loans, decline in asset quality, credit concentration and high foreign exchange exposure and volatility have led to financial instability and financial distress in deposit money banks in Nigeria. The study examined the effect of corporate governance on the financial stability of deposit money banks in Nigeria. Ex-post facto research design was adopted for the study. The population of the study comprised the 21 listed deposit banks on the Nigerian stock exchange as at September 2016. The study made use of a total of 10 banks as sample size which was categorized under the listed deposit money banks in Nigeria. These banks were selected using stratified sampling technique. Data were collected from the annual reports for the period of ten years (2007-2016). Descriptive Statistics test were carried out, hausman test and cross-section random effect test were analyzed. The analysis revealed that all corporate governance variables have a positive and negative effect on capital adequacy at Adj.R2 = 0.052 and F test score of 2.832, capital structure at Adj.R2 = 0.088 and F test score of 4.187, and liquidity at Adj.R2 = 0.004 and F test score of 1.149. Corporate governance has a positive and negative effect on financial stability with P-value of F statistics at 0.000 and Adjusted R2 = 12.9%. The study concluded that corporate governance has a significant effect on financial stability. This means that as the content of corporate governance improves financial stability increases. The study recommended that to increase financial stability, management should focus on ensuring that there is effective corporate governance in the organization.