The aim of this study is to examine whether internalized AIDS stigma among HIV patients one year after antiretroviral therapy (ART) initiation is associated with sociodemographic characteristics, health status, social support, quality of life (QoL), and ARV adherence. This is a prospective study of all treatment-naive patients (N=735) recruited from all three public hospitals in Uthukela health district in KwaZulu-Natal and followed up at 6 and 12 months being on ART. Results indicated that despite a decrease in stigma seen in this study (may be due to ART) the level of stigma and discrimination remains high, and stigma reduction interventions are urgently needed in this population. CD4 cell counts significantly increased and HIV symptoms reduced significantly but depression symptoms remained high and even increased after 12 months on treatment. In multivariate analysis lower CD4 cell counts (odds ratio 0.5, 0.3-0.9), severe depression (5.6, 2.5-12.5) and low QoL (0.6, 0.5-0.8) were associated with internalized AIDS stigma. These findings may suggest that HIV care should include counseling and support that includes stigma concerns, depression, and QoL prior to and during the first year following diagnosis.