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Objectives: Weight‐based stigma is often experienced by individuals who are overweight and obese, and is associated with a range of deleterious physical and mental health outcomes. Research is lacking on the mechanisms through which these relationships occur. This paper examines two potential mechanisms: internalised weight stigma and self‐compassion. Method: A sample of 147 overweight and obese Australian females aged between 18 and 45 years completed a series of self‐report questionnaires measuring: experienced weight stigma, internalised weight stigma, self‐compassion, psychological distress, body shame, loneliness, and life satisfaction. Results: Internalised weight stigma mediated the relationship between experienced weight stigma and body shame such that greater experienced weight stigma led to greater internalised weight stigma, which in turn led to greater body shame. Additionally, self‐compassion mediated the relationship between experienced weight stigma and several psychosocial factors such that greater experienced weight stigma led to lower self‐compassion, which led to greater psychological distress, higher perceived loneliness, and lower satisfaction with life. Conclusions: Findings support previous research indicating that internalised weight stigma plays a mediating role in the relationship between experienced weight stigma and adverse outcomes. This study extends upon prior research by investigating previously unexamined outcome variables and exploring the simultaneous mediating role of self‐compassion. The findings suggest that both internalised weight stigma and self‐compassion each play a different but important role in the way in which weight stigma impacts on overweight and obese women. Results from this study have implications in terms of psychological intervention for overweight and obese individuals in clinical practice. [ABSTRACT FROM AUTHOR]