Purpose-this study investigates the effect of asymmetric information on dividend policy in listed companies in Tehran Stock Exchange. Methodology-four main hypothesis have designed by theoretical framework, and tested on 111 listed companies in Tehran stock exchange during 2003 to 2007. The statistic analysis had done by malt- variable regression analysis. Findings-the study findings show that there is a meaningful and reverse relationship between asymmetric information and dividend policy. Some other findings show there is a meaningful relationship between dividend policy and return on stock but there is no meaningful relationship between dividend policy with firm size and book value to market value of equity ratio. Practical implementation-the finding of the study could be helpful for university students and users of financial information and other financial analysts in capital market.