This study examines the behavior of capital ratios of Turkish banks over the business and financial cycles in the period of 1993:Q4-2014:Q3 and the sub-period 2003:Q1-2014:Q3. Capital adequacy ratio defined by Basel Committee on Banking Supervision and equity to asset ratio are used in the analyses. The capital ratios are found to behave countercyclical over the cycle, which is more pronounced in the subsample of 2003:Q1-2014:Q3. Banks‟ capital ratios react more to the movements in the financial cycle than business cycle. The risk based capital adequacy ratio behaves more countercyclical than equity to asset ratio. Lagged capital ratios, credit risk, size, profitability, funding structure and liquidity are found to be significant determinants of capital ratios. Capital ratios of Turkish banks are sensitive to the changes in Turkish legislation on capital adequacy.