Objective: Health-related stigma is associated with negative psychological and quality of life outcomes in lung cancer patients. Thisstudy describes the impact of stigma on lung cancer patients’ psychological distress and quality of life and explores the role of social constraints and illness appraisal as mediators of effect. Methods: A self-administered cross-sectional survey examined psychological distress and quality of life in 151 people (59% response rate) diagnosed with lung cancer from Queensland and New South Wales. Health-related stigma, social constraints and illness appraisals were assessed as predictors of adjustment outcomes. Results: Forty-nine percent of patients reported elevated anxiety; 41% were depressed; and 51% had high global distress. Health-related stigma was significantly related to global psychological distress and quality of life with greater stigma and shame related to poorer outcomes. These effects were mediated by illness appraisals and social constraints. Conclusions: Health-related stigma appears to contribute to poorer adjustment by constraining interpersonal discussions about cancer and heightening feelings of threat. There is a need for the development and evaluation of interventions to ameliorate the negative effects of health-related stigma among lung cancer patients.