The study discusses the stigma experiences of service users in mental health care, within the debate on the role of the biomedical framework for mental health care and power relations in society. Interview data of inpatient users (n = 42) and care providers (n = 43) from two Belgian psychiatric hospitals were analyzed using a constructivist grounded theory approach: Findings offer insight into how stigma experiences are affected by social structure. Stigma seemed to be related to the relation between care providers and service users their social position. The concept “mental health literacy” is used to frame this finding. In paying attention to the specific cultural and normative context, which influences the relationship between mental health literacy and stigma, it is further possible to cast some light on the meaning of the biomedical model for the construction and maintenance of power relations in mental health care and broader society.