Using a novel and dynamic measure of fund-level herding that captures the tendency of a fund manager to imitate the trading decisions of the institutional crowd based on a sample of 3490 mutual funds in China for 21 years between 2003 and 2023, we find that funds with higher herding tendencies face significantly elevated delisting risks. Additionally, herding behavior is associated with shorter fund lifespans, smaller asset bases, and higher portfolio manager turnover rates. These results remain robust after employing a battery of methods to address endogeneity concerns. Collectively, our study demonstrates that herding substantially amplifies funds’ running risks.