Loneliness describes the distressing experience associated with perceived social disconnection. Despite the clear links between loneliness and mental and physical health, relatively little is known about how loneliness affects cognition. To assess the effects of loneliness on cognitive distance between the self and others, participants completed an implicit memory task for adjectives encoded in relation to the self, a close friend, or a celebrity. We assessed item memory accuracy and sensitivity, and depth of processing was assessed through source monitoring and metamemory performance. In addition, participants reported their trait loneliness and depression. An overall self-referential advantage was identified compared with both friend and celebrity encoded items. Likewise, a friend-referential advantage was identified compared to celebrity-encoded items. Metacognitive sensitivity (sensitivity of confidence for correct and incorrect responses) and metacognitive bias (confidence regardless of accuracy) showed a similar pattern. Lonelier individuals showed a greater self-referential bias in comparison to words encoded in relation to a close friend, coupled with a smaller friend-referential bias in comparison to words encoded in relation to celebrity. More depressed individuals also showed a greater self-referential bias in comparison to words encoded in relation to a close friend, but this did not explain the relationship with loneliness. Therefore, perceived social isolation (loneliness) is reflected in a greater cognitive distance between self and close friends and this operates independent of depression. The results have important implications for understanding the social contextual effects on memory and the cognitive ramifications of loneliness.