Reputation is the key mechanism in promoting human cooperation. On the one hand, people judge the trustworthiness of a partner and guide their behavior towards the partner based on their reputation. On the other hand, when reputation at stake, individuals act more cooperatively to gain a good reputation, thereby increasing the chance of getting help from others in the future. However, in daily life, only a fraction of the population can gain other’s reputations through direct observation, and these could inhibit the emergence of human cooperation. Gossip is very valuable to the third party who is absent. As an important way of exchanging social information, gossip is assumed to serve as a critically indirect mean for reputational information transmission, thereby helping to sustain the function of reputation systems. This claim raises issues about how gossip can promote cooperation by facilitating reputation transmission and how accurate and effective it is. This paper aims to review research on gossip to address those questions from the perspectives of gossipers, recipients, and gossip targets. First, after witnessing others’ behaviors in social dilemmas, observers are ready to share the reputation of the targets to the other members in the group, especially the reputation of defectors, even at a personal cost. Moreover, the valence of gossip accurately reflects the targets’ behaviors. Negative emotion and prosocial motivation are considered as the crucial factor driving observers to convey the defectors’ reputation. Second, after receiving the gossip information, recipients perceive it positively and use it as a guide to determine whether to cooperate with the targets and whom to interact. Notably, indirect information still influences the recipient’s decision even in the presence of substantial direct information. Although gossip could be intentionally misled in real life, comparing information from multiple sources could be an effective strategy for recipients to avoid the adverse influences of inaccurate gossip. Finally, when facing the threat of being gossiped, the gossip targets behave in a more prosocial fashion to demonstrate a positive reputation through gossip. Specifically, they act more generously, return more to their trustors, and contribute more to the group, when they know that the observers could potentially spread their reputation to their future partners. In sum, the accumulating evidence manifests that gossip is an accurate and effective way of reputation transmission, helping to sustain a high level of cooperation. For a better understanding of the mechanism of reputation transmission via gossip, further studies are needed to test. First, new experiments could be undertaken to examine the reciprocal motivation of gossipers to address the ultimate explanation of reputational information sharing. Second, future work is needed to investigate the active role of recipients during gossip. Investigations on the impact of being gossiped about on the targets are also recommended. Moreover, it will be worthwhile to investigate the neural substrate of reputational transmission and cooperative behavior by using neuroimaging methods.