The aim of this paper is to review the effect of corporate diversification on information asymmetry and firm performance. To test the research hypothesis, a sample of 47 companies listed in Tehran Stock Exchange over the period 2008-2012 based on panel method was taken. In these models, the presence or absence of effects models (fixed or random) is reviewed and finally the best model is estimated. The results indicate that corporate diversification using entropy influenced on information asymmetry and firm performance. With controlling other variables, the results indicate when ENTROP increases one unit, STDRET increases 0.49 unit but with controlling other variables, the results indicate when ENTROP increases or decreases one unit, ROA does not change.