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Objective: The objective of this study was to determine whether stigma affects the self-esteem of persons who have serious mental illnesses or whether stigma has few, if any, effects on self-esteem., Methods: Self-esteem and two aspects of stigma, namely, perceptions of devaluation-discrimination and social withdrawal because of perceived rejection, were assessed among 70 members of a clubhouse program for people with mental illness at baseline and at follow-up six and 24 months later., Results: The two measures of perceptions of stigma strongly predicted self-esteem at follow-up when baseline self-esteem, depressive symptoms, demographic characteristics, and diagnosis were controlled for. Participants whose scores on the measures of stigma were at the 90th percentile were seven to nine times as likely as those with scores at the 10th percentile to have low self-esteem at follow-up., Conclusions: The stigma associated with mental illness harms the self-esteem of many people who have serious mental illnesses. An important consequence of reducing stigma would be to improve the self-esteem of people who have mental illnesses.