This chapter addresses the psychological effects of social stigma. Stigma directly affects the stigmatized via mechanisms of discrimination, expectancy confirmation, and automatic stereotype activation, and indirectly via threats to personal and social identity. We review and organize recent theory and empirical research within an identity threat model of stigma. This model posits that situational cues, collective representations of one's stigma status, and personal beliefs and motives shape appraisals of the significance of stigma-relevant situations for well-being. Identity threat results when stigma-relevant stressors are appraised as potentially harmful to one's social identity and as exceeding one's coping resources. Identity threat creates involuntary stress responses and motivates attempts at threat reduction through coping strategies. Stress responses and coping efforts affect important outcomes such as self-esteem, academic achievement, and health. Identity threat perspectives help to explain the tremendous variability across people, groups, and situations in responses to stigma.