This paper aims to investigate the relationship between product market competition and financing costs of the firms listed in the Tehran Stock Exchange. This proceeded with control effects of firm size, and also, financial leverage of firms. In addition, Herfindahl Hirschman Index (HHI), firms’ concentration ratios, and Lerner and adjusted Lerner index, were used as competition measures in product market. The statistical population constitutes of the firms listed in the Tehran Stock Exchange, in the years 1382-1390. Multivariable linear regression analysis was used to test the study hypotheses. The results indicated that, in overall, there were significant relationship between product market competition indices and cost of common stock capital, and between competition indices and cost of debt as the criterion of financing costs. Therefore, it was recommended that the firms, by designing and applying intelligent strategies and target-oriented financing cost decisions, make their position secure in the market and increase their market share.