The Moon looks bigger on the horizon due to an optical illusion called the "Moon illusion." This illusion is caused by the way the brain interprets the Moon's size relative to objects near the horizon, such as trees and buildings, which provide a context that makes the Moon appear larger. When the Moon is high in the sky, without nearby reference objects, the brain perceives it as smaller. Despite the appearance, the Moon's actual angular size remains constant, and measurements show it is actually slightly farther away on the horizon, which should make it appear slightly smaller, not larger. The exact psychological and perceptual mechanisms behind this illusion are still debated, but it is generally understood as a trick of human perception rather than a physical change in the Moon's size or distance.
