The Indian stock market has witnessed a significant transformation since the mid-2000s, driven largely by the growing participation of Mutual Funds (MFs) and Foreign Institutional Investors (FIIs). This study examines the impact of MF and FII investment flows on stock market performance and volatility in India over the period 2005–2026. Using secondary data from the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), National Stock Exchange (NSE), and Bombay Stock Exchange (BSE), the study employs econometric techniques including unit root tests, correlation analysis, multiple regression models, and volatility modelling. The findings indicate that FII flows exert a stronger influence on short-term market movements and volatility, whereas mutual fund investments contribute to market stability and long-term growth. The study offers valuable insights for policymakers, regulators, and investors regarding capital flow management and market resilience in emerging economies.