AbstractIndividuals' risk perceptions shape their attitudes and behaviors, and to the extent that governments respond to public demands, they also influence public policy priorities. Conversely, risk misperceptions—that is, when risk perceptions do not align with realities—may lead to suboptimal behaviors and inefficient public policy. This study investigates the phenomena of environmental risk misperceptions. Specifically, with an original survey that enables a direct comparison of perceived and actual environmental risks at the local level, it examines the relationships between personal attributes and risk misperceptions. The findings show that individuals exhibit optimism bias in assessing local environmental risk. On average, people rank their communities as experiencing less risk from toxic air pollution than objective measures suggest. Moreover, Whites, males, conservatives, and older people tend to have larger optimism bias and have lower chances of possessing correct risk perceptions than their counterparts, respectively, while respondents who are married, poor, who go to church regularly, and have strong pro‐environmental orientation, tend to have smaller optimism bias and have higher chances of possessing correct risk perceptions than their respective counterparts. The systematic misperception of local environmental risk underscores the importance of information provision and risk communication, and the sociopolitical correlates of misperception suggest that targeted and more nuanced strategies are required to correct misperceptions.