This paper is concerned with stability analysis of discrete-time networked control systems over a communication channel subject to packet loss whose behavior is modeled by an i.i.d Bernoulli process with a packet dropping probability bounded by a constant. A necessary and sufficient condition for stability is obtained. A packet dropping margin is introduced as a measure of stability robustness of a system against packet dropping. and a formula for it is derived. A design method is proposed for achieving a large margin subject to a constraint that the system has a set of prescribed nominal closed-loop poles. (c) 2007 Elsevier Ltd. All rights reserved.