This paper examines asset fire sales and institutional price pressure in equity markets using mutual fund transaction data from 1980 to 2003. It finds that mutual funds experiencing large outflows tend to reduce existing positions, creating price pressure in securities held by multiple funds. Investors who provide liquidity during such events earn significant abnormal returns. Future transactions are predictable, creating incentives for front-running. Funds with large inflows tend to increase existing positions, creating price pressure in common stocks. The paper also finds that asset fire sales are costly, with prices often far below fundamental values. Mutual funds with significant outflows are more likely to sell, and these sales are often at fire sale prices. The paper identifies fire sales by measuring the pressure on mutual fund holdings. It finds that fire sale stocks experience significant price drops followed by rebounds. The paper also finds that inflow-driven purchases can create price pressure, with stocks involved in such purchases having high abnormal returns. The paper concludes that asset fire sales and institutional price pressure are significant in equity markets, with investors able to profit from anticipating these events. The paper also highlights the persistence of institutional price pressure and its implications for fund performance and capital flows.This paper examines asset fire sales and institutional price pressure in equity markets using mutual fund transaction data from 1980 to 2003. It finds that mutual funds experiencing large outflows tend to reduce existing positions, creating price pressure in securities held by multiple funds. Investors who provide liquidity during such events earn significant abnormal returns. Future transactions are predictable, creating incentives for front-running. Funds with large inflows tend to increase existing positions, creating price pressure in common stocks. The paper also finds that asset fire sales are costly, with prices often far below fundamental values. Mutual funds with significant outflows are more likely to sell, and these sales are often at fire sale prices. The paper identifies fire sales by measuring the pressure on mutual fund holdings. It finds that fire sale stocks experience significant price drops followed by rebounds. The paper also finds that inflow-driven purchases can create price pressure, with stocks involved in such purchases having high abnormal returns. The paper concludes that asset fire sales and institutional price pressure are significant in equity markets, with investors able to profit from anticipating these events. The paper also highlights the persistence of institutional price pressure and its implications for fund performance and capital flows.