Open-end mutual funds can use redemptions in kind to meet investor redemption requests by delivering securities held by the fund in lieu of cash. Such a tool can mitigate the need of asset fire sales while passing associated liquidation costs to the redeeming investor. Greater asset illiquidity, greater flow volatility, and younger funds are associated with a higher likelihood of funds utilizing redemptions in kind. Investors in illiquid funds with a greater likelihood of using redemptions in kind exhibit less run-like behavior. Redemptions in kind helps reduce the adverse effect of flow-induced pressure on stock performance and improve fund performance subsequent to extreme investor redemptions. Offsetting these benefits, redemptions in kind also reduces investors’ flow sensitivity to good performance. I find further evidence suggesting that, when redeeming in kind, funds deliver illiquid securities during periods when the market is illiquid and volatile.