We investigated the relationship between internalized stigma of mental illness at baseline and depressive and psychotic symptoms 3 and 6 months later, controlling for baseline symptoms. Data on homeless veterans with severe mental illness (SMI) were provided by the Northeast Program Evaluation Center (NEPEC) Special Needs-Chronic Mental Illness (SN-CMI) study (Kasprow and Rosenheck, 2008). The study used the Internalized Stigma of Mental Illness (ISMI) scale to measure internalized stigma at baseline and the Symptom Checklist-90-R (SCL-90-R) to measure depressive and psychotic symptoms at baseline and 3 and 6 month follow-ups. Higher levels of internalized stigma were associated with greater levels of depressive and psychotic symptoms 3 and 6 months later, even controlling for symptoms at baseline. Alienation and Discrimination Experience were the subscales most strongly associated with symptoms. Exploratory analyses of individual items yielded further insight into characteristics of potentially successful interventions that could be studied. Overall, our findings show that homeless veterans with SMI experiencing higher levels of internalized stigma are likely to experience more depression and psychosis over time. This quasi-experimental study replicates and extends findings of other studies and has implications for future controlled research into the potential long-term effects of anti-stigma interventions on mental health recovery.