Low gain feedback, a parameterized family of stabilizing state feedback gains whose magnitudes approach zero as the parameter decreases to zero, has found several applications in constrained control systems, robust control and nonlinear control. In the continuous-time setting, there are currently three ways of constructing low gain feedback laws: the eigenstructure assignment approach, the parametric ARE based approach and the parametric Lyapunov equation based approach. The eigenstructure assignment approach leads to feedback gains explicitly parameterized in the low gain parameter. The parametric ARE based approach results in a Lyapunov function along with the feedback gain, but requires the solution of an ARE for each value of the parameter. The parametric Lyapunov equation based approach possesses the advantages of the first two approaches and results in both an explicitly parameterized feedback gains and a Lyapunov function. The first two approaches have been extended to discrete-time setting. This paper develops the parametric Lyapunov equation based approach to low gain feedback design for discrete-time systems. (C) 2008 Elsevier Ltd. All rights reserved.