The effect of debt on private investment is not determined unambiguously in economic theory. Indeed, according to the theory, the relationship between debt and private investment can either be negative (debt overhang) or positive (accelerator effect on economic growth, and hence on private investment). This study consists of identifying the nature of this relationship in the case of Turkey, over the 1963-2000 period. The authors have estimated the relationship for two periods: 1963-98 and 1988-2000, given the development of a domestic financial market which gave birth to a new type of indebtedness, namely internal public debt. These estimations reveal two distinct effects: external debt has a positive effect on private investment, whereas internal debt has a negative one.