Internal control systems constituted fundamental mechanisms for ensuring operational efficiency, financial integrity, and regulatory compliance in banking institutions. In Kampala City, commercial banks operated within increasingly complex regulatory environments while facing competitive pressures that demanded superior financial performance. This study investigated the effect of internal control systems on financial performance of commercial banks in Kampala City, conducted between May 2023 and January 2024. The research examined 24 licensed commercial banks operating in Kampala, which collectively controlled approximately 85% of Uganda's banking sector assets. Internal control systems were analyzed across five components based on the COSO framework: control environment, risk assessment, control activities, information and communication, and monitoring activities. Financial performance was measured using both accounting-based metrics including return on assets, return on equity, net profit margin, and market-based indicators including asset quality and operational efficiency ratios. The study employed a descriptive correlational research design utilizing mixed methods approaches. From 24 licensed commercial banks in Kampala, 20 banks participated in the study, representing an 83.3% institutional response rate. Purposive sampling selected 180 respondents including internal auditors, risk management officers, finance managers, and compliance officers from participating banks. Data collection utilized structured questionnaires administered to bank officials and document analysis of audited financial statements for the period 2020-2023. Key informant interviews were conducted with 15 senior bank executives and 5 Bank of Uganda supervision officials. The questionnaire demonstrated excellent reliability with Cronbach's Alpha of 0.891. Data analysis employed SPSS version 29, utilizing descriptive statistics, Pearson correlation analysis, and multiple regression models to establish relationships between internal control components and financial performance indicators. Findings revealed that internal control systems significantly affected financial performance of commercial banks (r=0.816, p