This study investigates the influence of Non-Performing Loans (NPLs) on the financial performance of commercial banks listed at the Dar es Salaam Stock Exchange (DSE) between 2017 and 2024. Using a causal research design, five banks (NMB, CRDB, MKOMBOZI, MAENDELEO, and DCB) were purposively selected. Secondary data were sourced from audited annual financial statements and Bank of Tanzania (BOT) reports. The System Generalized Method of Moments (GMM) was employed to address endogeneity and dynamic panel effects, while Fixed Effects (FE) and Random Effects (RE) models were applied as robustness checks. Findings reveal that NPLs exert a strong and statistically significant negative influence on financial performance, measured by Return on Assets (ROA) and Return on Equity (ROE). Conversely, capital adequacy and loan loss provisions showed mixed but generally positive mitigating effects. These findings provide practical insights for policymakers, regulators, and practitioners on the importance of enhancing credit risk management and compliance with international regulatory frameworks.