This paper examines how stakeholder orientation, defined as the legal flexibility granted to corporate directors to consider the interests of non-shareholder groups, affects firms' dividend smoothing practices. While incorporating broader stakeholder interests may enhance trust and reduce reliance on signaling mechanisms such as stable dividend payouts, it may also dilute shareholder oversight and increase managerial discretion. Exploiting the staggered adoption of stakeholder constituency statutes across U.S. states as a quasi-natural experiment, we find that affected firms reduce the degree of dividend smoothing. This effect is more pronounced among consumer-oriented, labor-intensive, and low–liquidation-value firms, where stakeholder interests are particularly salient and conflicts between shareholders and stakeholders are more severe. The effect is also stronger among firms with higher cash holdings and free cash flow, where agency costs are likely to be greater. Overall, our findings suggest that expanding directors' fiduciary scope beyond shareholders can meaningfully influence corporate payout policies.