PurposeThe purpose of this paper is to establish a criterion for the global asymptotic stability of fixed-point state–space digital filters using saturation overflow arithmetic.Design/methodology/approachThe method of stability analysis used in this paper is the second method of Lyapunov. The approach in this paper makes use of a precise upper bound of the state vector of the system and a novel passivity property associated with the saturation nonlinearities.FindingsThe presented criterion leads to an enhanced stability region in the parameter-space as compared to several existing criteria.Practical implicationsWhen dealing with the design of fixed-point state–space digital filters, it is desirable to have a criterion for selecting the filter coefficients so that the designed filter becomes free of overflow oscillations. The criterion presented in this paper provides enhanced saturation overflow stability region and therefore facilitates the designer greater flexibility in selecting filter parameters for overflow oscillation-free realization of digital filters.Originality/valueThe approach uses the structural properties of the saturation nonlinearities in a greater detail. The exploitation of upper bound of the system state vector together with a new passivity property of saturation nonlinearities is a unique feature of the present approach. The presented approach may lead to results not covered by several existing approaches.