Self stigma among people with mental illness results from multiple cognitive and environmental factors and processes. It can negatively affect adherence to psychiatric services, self esteem, hope, social integration and quality of life of people with mental illness. The purpose of this study was to measure the level of self stigma and its correlates among people with mental illness at Jimma University Specialized Hospital, Psychiatry clinic in southwest Ethiopia.Facility based cross-sectional study was conducted on 422 consecutive samples of people with mental illness using interviewer administered and pretested internalized stigma of mental illness (ISMI) scale. Data was entered using EPI-DATA and analysis was done using STATA software. Bivariate and multivariate linear regressions were done to identify correlates of self stigma.On a scale ranging from 1 to 4, the mean self stigma score was 2.32 (SD = 0.30). Females had higher self stigma (std. β = 0.11, P < 0.05) than males. Patients with a history of traditional treatment had higher self stigma (std. β = 0.11, P < 0.05). There was an inverse relationship between level of education and self-stigma (std. β = -0.17, P < 0.01). Perceived signs (std. β = 0.13, P < 0.05) and supernatural causes of mental illness (std. β = 0.16, P < 0.01) were positively correlated with self stigma. Higher number of drug side effects were positively correlated (std. β = 0.15, P < 0.05) while higher self esteem was negatively correlated (std. β = -0.14, P < 0.01) with self stigma.High feeling of inferiority (alienation) but less agreement with common stereotypes (stereotype endorsement) was found. Female showed higher self stigma than male. History of traditional treatment and higher perceived supernatural explanation of mental illness were associated with higher self stigma. Drug side effects and perceived signs of mental illness were correlated with increased self stigma while education and self esteem decreased self stigma among people with mental illness. Patient empowerment psychosocial interventions and strategies to reduce drug side effects can be helpful in reducing self stigma among people with mental illnesses.