We aimed to examine internalized stigma of patients with mental illness in Korea and identify the contributing factors to internalized stigma among socio-demographic, clinical, and psychosocial variables using a cross-sectional study design. A total of 160 patients were recruited from a university mental hospital. We collected socio-demographic data, clinical variables and administered self-report scales to measure internalized stigma and levels of self-esteem, hopelessness, social support, and social conflict. Internalized stigma was identified in 8.1% of patients in our sample. High internalized stigma was independently predicted by low self-esteem, high hopelessness, and high social conflict among the psychosocial variables. Our finding suggests that simple psychoeducation only for insight gaining cannot improve internalized stigma. To manage internalized stigma in mentally ill patients, it is needed to promote hope and self-esteem. We also suggest that a relevant psychosocial intervention, such as developing coping skills for social conflict with family, can help patients overcome their internalized stigma.