This study examines the relationship between the ownership structure and performance of 31 firms listed on the Palestine Stock Exchange (PS) during the period of 2008-2012. The results reveal that ownership concentration to be significantly negative related with performance of firms (Tobin’s Q and ROA), while the insider ownership (executive management and directors of board) found to have significant positive relation with firm's performance (Tobin's Q and ROA). The findings supported the prediction of alignment hypothesis (aligning interests between manager and shareholders), and the results provided evidence for negative effect of ownership concentration which could be considered support for entrenchment hypothesis.