Greenwashing has become a widespread phenomenon and obstructs green products, but literature on how consumers react to misbehaving brands is still scarce. This study aims to investigate the effect of greenwashing on consumers’ brand avoidance, integrating the mediating effect of brand hypocrisy and the moderating effect of CSR–CA belief. Data were acquired from a questionnaire survey of 317 consumers. Hypotheses were tested in a first-stage moderated mediation model with a bootstrapping method using the PROCESS program in SPSS. The empirical results demonstrated that greenwashing has a positive effect on brand avoidance, which is partially mediated by brand hypocrisy. Meanwhile, the positive effects of greenwashing on brand hypocrisy and brand avoidance are both weaker at higher levels of CSR–CA belief. Furthermore, the mediating effect of brand hypocrisy is also weaker at higher levels of CSR–CA belief. Based on these findings, we recommend that brands fulfill their environmental claims and balance their quality control, manufacturing costs and environment protection. Moreover, the government and environmental protection organizations should educate the public that there is not necessarily a tradeoff between corporate social responsibility (CSR) and corporate capability (CA).