This study investigates the effect of social distancing on the local bias of institutional investors. Using SafeGraph’s Social Distancing Metrics data and SEC’s EDGAR 13F filings, we find that stay-at-home duration ratio decreases institutional investors’ local holdings and firms’ institutional ownership in the U.S. We also exploit the lockdown orders across various states during the COVID-19 pandemic as exogenous shocks to conduct the stacked regression estimation, which yields a similar result. Our channel analysis using abnormal return indicates that social distancing mitigates local bias by constraining the information advantage of local investors rather than alleviating their cognitive bias.