The present study aimed to investigate the mediating role of financial literacy in the relationship between biased behavior and investment decisions of managers. The research method of this study was correlational in nature and content, which analyzed the correlation relationship using secondary data extracted from the financial statements of companies listed on the Tehran Stock Exchange. On the other hand, the present study was post-event (semi-experimental), that is, it was conducted based on the analysis of past and historical information (financial statements of companies). The study is considered to be applied in terms of its purpose and descriptive-correlation in terms of its method. The statistical population of this study was all companies on the Tehran Stock Exchange during the years 1392 to 1401. The sample used was also selected through the systematic elimination method from the statistical population. Eviews software and Pearson correlation and regression methods were used to analyze the data. The results of statistical data analysis in the fourth chapter showed that there is a relationship between managers' biased behavior and investment decisions.