This study aims to explore the effects offinancial liberalization on demand for money inThailand. The first objective focuses on the stabilityin the short run and the long run of money demandbefore and after the period of financialliberalization. The second goal is to study the errorcorrection process from the short run adjustment ofreal money stock to its long run equilibrium. The lastpoint is to find out whether the monetary aggregate isstill appropriate to be used as monetary target afterthe period of liberalization. The study finds that both narrow and broad moneydemand functions have cointegration with itsdeterminants, such as income, interest rate, financialinnovation, expected rate of return of assets in stockmarket and foreign interest rate, which show they havelong run relationship. However, the results find thatthe demand for narrow money is affected by measures offinancial liberalization more than the broad moneydemand. The demand for narrow money is more sensitivewith interest rate and the expected rate of return frominvestment in stock market. Moreover, a comparison ofthe cointegration and ECM result for narrow and broadmoney demand indicates that the broad money have beenrelatively more stable than narrow money. The finding can be concluded that the broad moneyis more appropriate than narrow money to be used as anmonetary target. The comparison between interest ratetarget policy and monetary target policy shows that inorder to stabilize the economy, broad monetary targetis more efficient than the interest rate target.