In light of the growing concern about brand dilution of luxury brands on social media, the purpose of this research was to examine the impact of brand-consumer engagement on value perceptions of luxury fashion brands within the context of social media marketing. The result of Study 1 demonstrated that luxury brands were inherently psychologically distant than mainstream brands. The results of Study 2 and Study 3 showed that a luxury brand with a high level (vs. low level) of brand-consumer engagement resulted lower value perceptions (i.e., social, uniqueness, and quality value perceptions) of the brand, and such relationships were mediated by decreased psychological distance. This research provides important implications for luxury brand managers and scholars that luxury fashion brands should maintain psychological distance on social media to protect the core value perceptions of the brands.