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Background: Social media marketing has grown rapidly in recent years and has become a standard tool for marketers. As a result, companies use social media influencers (SMIs) to reach their target audiences. One important aspect of influencer marketing is the relational aspect. Followers who exert parasocial relationship (PSR) with SMIs are more prone to respond positively to influencer marketing and the persuasion tactics put forward by companies and SMIs. It has therefore become crucial to understand how PSR and followers' persuasion knowledge affect followers' perception of transparency in sponsored posts. Purpose: The purpose of this thesis is to explore parasocial relationships and persuasion knowledge impact on followers’ perceived transparency of social media influencers. Methodology: This abductive thesis used a qualitative strategy for the collection of empirical data. A combination of four focus groups and semi-structured interviews were used, leading to a total of 17 participants. The data was analyzed using thematic analysis, resulting in three major themes and nine sub-themes. Findings: We found that followers’ perceived transparency has direct relationships with PSR and persuasion knowledge, respectively. However, there was no direct link between PSR and persuasion knowledge. Instead, this relationship was indirect through perceived transparency. Furthermore, how these concepts affect each other determines how followers perceive and respond to sponsored content. Value: This thesis demonstrates the effectiveness perceived transparency has in SMIs sponsored content. Furthermore, we also extend the view and the meaning of PSR and persuasion knowledge, in response to perceived transparency. Lastly, this thesis illustrates PSR and persuasion knowledge’s effect on perceived transparency and how this ends in followers' perception of sponsored content.