Gossip, sharing information about an absent person, is an important way of spreading reputational information, crucial in fostering human cooperation. However, why should information possessors engage in gossip, and why should they be honest? We addressed this question based on a reputational account. In study 1, we found that when observed by potential investors, people were willing to pay more to share reputational information with those in need. Moreover, engaging in gossip did confer reputational benefits for gossipers by receiving more trust from investors, and gossipers' willingness to gossip predicted their subsequent trustworthiness. Study 2 further verified that observability promoted only honest information sharing and deterred dishonest gossiping. Consistently, only honest gossipers were trusted more, while dishonest gossipers were perceived to be even less trustworthy than non‐gossipers, and only the motivation for honest gossiping could reflect gossipers' trustworthiness. These findings suggest that reputation can provide a solution to encourage gossiping and secure honesty.