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This paper examines the different roles in corporate information disclosure for active and passive fund holdings. Using semi-annual open-end fund holding data of the Chinese A-share listed firms from 2007-2016, we find that active fund holdings reduce the quality of information disclosure, and on the contrary, passive fund holdings increase the quality of information disclosure. We get robust results after controlling for potential endogeneity issues using subsample analyses and two-stage least-square regressions. Further analysis indicates that active fund holdings may trigger noise trading and finally play a negative role in corporate information disclosure, and passive fund holdings play a positive role mainly by improving corporate governance. Our findings have important policy implications in capital market development and suggest that market regulators should take active steps to develop long-term institutional investors and encourage them to participate in corporate governance. [ABSTRACT FROM AUTHOR]