The purpose of this study was to examine effect of internet banking on financial performance of commercial banks in Kenya. Internet banking under technology acceptance model extended from theory of reasoned action entails the inclusion of technology or information system within the operations of a bank. Internet banking is about creating complementary distribution channels in form of information technology. The study used descriptive survey research design. Both quantitative and qualitative data were collected to meet the objective. The proposed study area was Kisumu City targeting all the 34 commercial banks. A total of 11 banks were picked through a simple random sampling strategy. In addition, 5 employees were picked from each commercial bank through a simple random sampling strategy, while 11 branch managers purposively sampled from the selected banks. Therefore, the total number of participants forming a representative sample was 66 comprising of 55 employees and 11 branch managers of which there was a response rate of 92.7 for employees and 100% for branch managers. A combination of primary and secondary sources of data was used to obtain data. The primary sources included self-administered questionnaires and interviews. Document analysis was used to collect secondary data. Quantitative data was analyzed using descriptive statistics(frequency and percentages). Statistical analysis was done with the aid of Statistical Package for Social Sciences version 22.0. All the results of the quantitative analysis were presented in tables, charts, and graphs while the results of qualitative analysis presented in form of themes. From the quantitative analysis, the study established a positive effect of internet banking on financial performance of commercial banks. The qualitative findings also established that there is a positive effect of internet banking on financial performance of commercial banks. Based on the findings, the study recommends that commercial banks enhance their internet banking.