Liquidity management is very important for the stability and long-term existence of the commercial banks, especially in the developing countries with uncertain interest rate regime. Persistent fluctuations in interest rates, which influence banks’ cost of capital, their lending activities and their total liquidity levels, constitute major threats to financial stability. The study focused on the effect of interest rate risk on liquidity of the Kenya’s commercial banks. The study employed a quantitative explanatory research design. Primary data was collected from senior management staff of the 39 licensed commercial banks operating in Kenya as of 31st December 2023. A sample of ninety-one respondents was obtained using stratified random selection. Simple linear regression, Pearson correlation and descriptive statistics were analyzed using SPSS. Interest rate risk was operationalized by interest rate sensitivity, interest rate spread, interbank borrowing and loan to deposit ratio while liquidity was quantified by cash balances, cash to deposit ratio, liquid assets and dividend payout. The results indicate a high, significant positive association between interest rate risk and liquidity (r = 0.704, p < 0.001). The outcome of regression study shows that the interest rate risk has considerable impact on liquidity (β = 0.714, p < 0.001) and 67.0% (R2 = 0.670) of the volatility of the liquidity of commercial banks can be explained. These results attest to the benefits of efficient interest rate risk management on banks’ abilities to preserve sufficient liquidity and meet their financial commitments. We recommend commercial banks to enhance their interest rate risk management framework, maximize interest rate spreads and strengthen interbank liquidity management to increase resistance to interest rate movements. This study adds to the growing body of knowledge on bank risk management by giving empirical evidence on the relationship between interest rate risk and liquidity in the Kenyan banking sector. It also offers valuable information to bank management, regulators and legislators who wish to strengthen the stability of the financial system.