The purpose of this article is to identify the determinants of the operating lease among Malaysian firms in order to ensure the sustainable development of the firms. Data are collected from the top 100 listed companies in seven sectors of the economy covering 2005–2014. The pooled ordinary least square, fixed effect and random effect models were used for estimation. A robust SE estimation was also applied for cross‐sectional and time dependence estimation. The empirical results of the F‐test, LM test, and Hausman test suggest that the fixed‐effect model is the most appropriate in the Malaysian lease context. The robust SE test confirms the findings of the previous models. The results of the fixed effect model indicate that lease has a negative relationship with FAE, a positive relationship with interest cost (IC), a negative relationship with profit, and a positive relationship with size, and tax rate.