Objective: The social–cognitive model is useful in understanding internalized stigma, but research has not examined it in relationship to recovery orientation, an important outcome. This study examined the impact of the four stages of internalized stigma on recovery orientation and assessed cognitive insight as a moderator. Method: Data from a community sample of adults with serious mental illness (N = 268) were collected through structured interviews. Regression-based analyses were used to examine the main effects of internalized stigma on recovery orientation and the moderating effect of cognitive insight. Results: Applying stigmatizing beliefs to oneself and the related decrement in self-esteem each predicted decreased recovery orientation. Cognitive insight moderated the effect of self-application of stigmatizing beliefs on recovery orientation. Implications: Increasing cognitive insight by fostering flexibility in self-cognitions may help reduce internalized stigma. Interventions may also benefit from addressing the emotional component of internalized stigma, such as feelings of shame.