ABSTRACT: The study evaluated the effect of liquidity management on financial sustainability of large-scale retail supermarkets in Kenya. The study used Cash Management theory. The study adopted a cross-sectional research design. The study targeted nine large-scale retail supermarkets in Kenya and census sampling was employed. Secondary data was collected from audited financial statements. Data was analyzed through inferential. Inferential statistics consisted of correlational analysis and random effects model. The results indicated linear regression assumptions were met. The study results showed that liquidity management positively and significantly affects financial sustainability. This is supported with a regression coefficient of 0.4103. This was also accompanied with Probability values of 0.000. The study therefore concluded that liquidity management had a significant effect on financial sustainability of large-scale retail supermarkets. The study recommended that the management of large-scale retail supermarkets in Kenya should consistently monitor and maintain an optimal capital-to-asset ratio, management should set and enforce internal debt ceilings to limit excessive borrowing and management should prioritize efficient utilization of fixed assets.