This paper assesses the determinants and stability of money demand in Uganda during economic liberalization. Using dynamic ordinary least squares (DOLS) estimator cointegration method it is found that in the long run the main determinants of money demand are GDP, savings interest rate, inflation and foreign interest rate. There is evidence of currency substitution as agents take advantage of movement in foreign markets. In addition, using the Chow test it is found that money demand is stable both in the short and long run. The results have important implications for monetary policy conduct in the wake of continued economic liberalization.