When reproducing sounds over headphones, the simulated source can be externalized (i.e., perceived outside the head) or internalized (i.e., perceived within the head). Is it because it is perceived as more or less distant? To investigate this question, 18 participants evaluated distance and externalization for three types of sound (speech, piano, helicopter) in 27 conditions using nonindividualized stimuli. Distance and externalization ratings were significantly correlated across conditions and listeners, and when averaged across listeners or conditions. However, they were also decoupled in some circumstances: (1) Sound type had different effects on distance and externalization: the helicopter was evaluated as more distant, while speech was judged as less externalized. (2) Distance estimations increased with simulated distances even for stimuli judged as internalized. (3) Diotic reverberation influenced distance but not externalization. Overall, a source was not rated as externalized as soon as and only if its perceived distance exceeded a threshold (e.g., the head radius). These results suggest that distance and externalization are correlated but might not be aspects of a single perceptual continuum. In particular, a virtual source might be judged as both internalized and with a distance. Hence, it could be important to avoid using a scale related to distance when evaluating externalization.