Electronic Journal of Differential Equations, Vol. 2011 (2011), No. 19, pp. 1-21. Title: Quadratic forms as Lyapunov functions in the study of stability of solutions to difference equations Authors: Alexander O. Ignatyev (Inst. for Applied Math., Donetsk, Ukraine) Oleksiy Ignatyev (Michigan State Univ., MI, USA) Abstract: A system of linear autonomous difference equations $x(n+1)=Ax(n)$ is considered, where $x\in \mathbb{R}^k$, $A$ is a real nonsingular $k\times k$ matrix. In this paper it has been proved that if $W(x)$ is any quadratic form and $m$ is any positive integer, then there exists a unique quadratic form $V(x)$ such that $\Delta_m V=V(A^mx)-V(x)=W(x)$ holds if and only if $\mu_i\mu_j\neq1$ ($i=1, 2 \dots k; j=1, 2 \dots k$) where $\mu_1,\mu_2,\dots,\mu_k$ are the roots of the equation $\det(A^m-\mu I)=0$. A number of theorems on the stability of difference systems have also been proved. Applying these theorems, the stability problem of the zero solution of the nonlinear system $x(n+1)=Ax(n)+X(x(n))$ has been solved in the critical case when one eigenvalue of a matrix $A$ is equal to minus one, and others lie inside the unit disk of the complex plane. Submitted February 1, 2010. Published February 03, 2011. Math Subject Classifications: 39A11, 34K20. Key Words: Difference equations; Lyapunov function.