This study aims to examine the effect of cash holding and external financing on investment-cash flow sensitivity. The sample in this research is the firm of non-finance which was listed on the Indonesia Stock Exchange over the period 2008-2017. The sample in this study was divided into categories of financial constraint to determine the influence of both variables more clearly on firms with different financial conditions. The research method used panel data regression by using fixed effect model to estimate investment-cash flow sensitivity. This study found that cash holding had a positive and significant effect on investment-cash flow sensitivity. Furthermore, external financing also had a positive and significant effect on investment cash flow sensitivity. The result of research refers that external financing is a substitute of internal funding to finance their investment; therefore, the companies have to manage finances well to their investment to enhance the value of the company and maximize shareholder wealth.