One of the strongest expression of generalized distrust – i.e., distrust of human nature in general – can be found in a Japanese proverb, “Its best to regard everyone as a thief” (hito wo mitara dorobo to omoe). An expression of the other extreme, generalized trust, can also be found in another Japanese proverb, “you will never meet a devil as you walk through the social world” (wataru seken ni oni ha nai). I asked about these proverbs to hundreds of students in several colleges in Japan and found that the majority of the respon-dents considered that those who believe the former proverb are smarter (66% vs. 34%) and more likely to be successful in life (54% vs. 46%). They believed that distrust means social shrewdness and trust means gullibility. The results of experimental and survey research, however, provide evidences contrary to this popular belief. Based on these findings, I will present an argument that trust and social intelligence co-evolve, and distrust and lack of social intelligence constitute a vicious cycle. On the one hand, generalized distrust prevents people from engaging in further social interactions. Low-trusters are unwilling to enter into potentially beneficial but risky social interactions because they focus on the risk side of such interactions. This unwillingness of distrusters to engage in potentially beneficial but risky social interactions deters them from correcting their depressed level of trust. At the same time, their unwillingness to engage in risky but potentially fruitful interactions prevents them from improving the level of their social intelligence. The lack of social intelligence or social shrewdness, in turn, makes them vulnerable in such risky but potentially fruitful interactions. This vulnerability will then have two consequences. First, the lack of social intelligence makes them more gullible when they do in fact engage in such interactions. They will more often have experiences of failure than success in such interactions, and they will further learn to distrust others. Second, realizing this vulnerability, they will avoid engaging in such interactions. By engaging in such social interactions, they learn to distrust. By not engaging in such social interactions, they lose opportunities to learn social shrewdness and improve their level of their social intelligence or the ability to understand own and other peoples internal state, and use that understanding in social relations.