In this paper, we analyze empirically the effects of excess cash-motivated stock repurchase on overinvestment risk of firms listed on Korea Exchange from 1994 to 2011. The sample firms are classified into excess cash firms and non-excess cash ones according to the method of Opler et al. (1999). The number of firm-years of excess cash firms is 6,623 and that of non-excess cash ones is 8,226. The sample firms are also classified into low growth firms and high growth ones on the basis of MTB(market-to-book) ratio, and are classified into stock repurchasing firms and non-stock repurchasing ones as well. The number of firm-years of low growth firms is 7,424 and that of high growth ones is 7,425, while the number of firm-years of stock repurchasing firms is 2,436 and that of non-stock repurchasing ones is 12,413. The main results of this study can be summarized as follows. The excess cash of firms have significant positive effects on the probability of stock repurchase, and firms with low MTB ratio are more likely to repurchase stocks compared to firms with high MTB ratio. In other words, excess cash firms are more likely to repurchase stocks than nonexcess cash ones, and low growth firms are more likely to repurchase stocks than high growth ones. Managerial incentive and monitoring mechanism influence the stock repurchase decision. Incentive alignment between managers and owners and monitoring power by external stockholder influence the likelihood and value of stock repurchase in the presence of excess cash. For low MTB firms with excess cash, interaction variables among managerial ownerships, institutional ownerships and excess cash have significant positive effects on the probability of stock repurchase. Better managerial incentive alignment and closer monitoring by institutional stockholders are important factors stimulating excess cash-motivated stock repurchase. However, for high MTB firms with excess cash, these interaction variables are insignificant. High MTB firms have no overinvestment risk because they have plenty of growth opportunities. In other words, when growth opportunities are plenty, managerial and institutional ownership levels have no discernable intervening effects on the stock repurchase decision, and repurchasing and nonrepurchasing excess cash firms display statistically identical cash investment behavior. In conclusion, the intervening effects of managerial incentive alignment and monitoring by institutional stockholders on excess cash-motivated stock repurchase appear confined to situations where the agency problems between corporate insiders and external stockholders are particularly acute. These agency problems do affect stock repurchase when growth opportunities are scarce as well as when overinvestment risk is high. This result implies that better managerial incentive alignment and closer monitoring by institutional stockholders are important factors stimulating excess cash-motivated stock repurchase. This paper may have a few limitations because it may be an only early study about the effects of excess cash-motivated stock repurchase on overinvestment risk of firms listed on Korea Exchange. Therefore, we think that it is necessary to expand sample firms and control variables, and use more elaborate analysis methods in future studies.