Abstract: The theory of behavioral finance suggests that irrational investor sentiment is an important cause of stock mispricing. This paper firstly tests whether investor sentiment is the information source for insider trading or not. The empirical results show that insider selling (buying) tends and strength increase with higher (lower) investor sentiment. Furthermore, the impact of investor sentiment on insider selling is greater than insider buying. After controlling investor sentiment, the company's quarterly earnings information which is undisclosed did not play a significant impaction on insider selling transactions. The phenomenon is in line with the “Deterministic Effect” in “Prospect Theory”.