People with mental illness who internalize stigma often experience reduced self-esteem and impaired quality of life (QOL). Although QOL is recognized as a particularly useful measure to assess treatment outcomes, the links between internalized stigma, self-esteem and specific domains of QOL require further investigation. Objectives: To examine the relationship between internalized stigma, self-esteem and QOL, and to describe a model in which self-esteem mediates the effects of internalization of stigma on QOL. Methods: After informed consent, 403 mental health inpatients and outpatients (DSM-IV criteria), from hospital-based and community facilities participated in face-to-face interviews (231 men, 172 women, ages between 18 and 79). Self-report measures of internalized stigma (ISMI), self-esteem (RSES) and quality of life (WHOQOL-BREF) were administrated. Structural equation modeling was used to analyze the cross-sectional data. Results: Our results support the mediational role of self-esteem between internalized stigma and QOL. Furthermore, internalized stigma itself and together with self-esteem were found to negatively influence all of the WHOQOL domains. Differences across diagnostic groups and among treatment settings were found, which may be of an important value for improving the quality of care to provide to people with mental illness. Conclusions: The theoretical and empirical implications of the findings highlight the need for the development of interventions focused on targeting internalized stigma as well as self-esteem. This should be of great interest to research and clinical practice, allowing the design of mental health interventions aimed to improve the QOL of people with mental illness.

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