This paper investigates the association between the large shareholders’ activism quality and dividend smoothing behavior in the Tunisian context. Based on the agency and signalling theory predictions, it considers the effect of two conflicting model of dividend: the outcome and the substitute model. Using a sample of 44 companies making public offering over the period 1998-2009, the empirical evidence shows that dividend policy is the result of large shareholders’ preferences. Particularly, we find that the degree of dividend smoothing engaged by minority-controlled firms is more than the majority -controlled firms. Likewise, the degree of dividend smoothing engaged by financial institutions-controlled firms is more than the familycontrolled firms and the state-controlled firms. Taken together, the results are consistent with the outcome model of dividend policy.