This study investigates whether and how greenwashing—the gap between a firm's “green talk” and “green walk”—affects bond pricing. Using 3,810 public bonds issued by U.S. firms, we find a positive relationship between greenwashing and the cost of bonds. We identify the causal relationship by using the Federal Trade Commission's 2012 regulatory intervention to curb misleading environmental claims as an exogenous shock to greenwashing. We also find a more pronounced relationship between greenwashing and the cost of bonds for firms whose credit rating is adjacent to the investment–speculative borderline, firms operating in environmentally sensitive industries, and firms with opaque information environments. Moreover, our two-step channel analyses show that greenwashing is associated with higher environmental litigation costs and a higher chance of rating disagreements among credit rating agencies, thus identifying risk and information channels through which greenwashing increases the cost of bonds. Our results shed new light on the economic consequences of greenwashing through the lens of the bond market.