Exploiting the staggered removal of short-sale bans in China，the paper examines how short-selling affects share overvaluation from the perspective of heterogeneous beliefs． The study finds that removal of shortsale bans can decrease share overvaluation． Short-sellers use both public information and private information to trade，contributing to the price discovery． Furthermore，short-sellers release more pessimism or negative information by short selling more stocks，which can decrease share overvaluations． Short-sellers trade to decrease overvaluation by selling stocks with higher contemporaneous returns and private information． The study provides new and direct evidences for worldwide arguments on this problem: whether short-selling can improve stock pricing efficiency or not． At the same time，this study provides a unified conclusion to the information sources of short-sellers．