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Positive ingroup perceptions have been recognized as a protective factor that enhances stigma resistance and improves the well-being of people from minority communities. However, the impact of positive ingroup perceptions on mental health recovery has rarely been explored. The present study proposed an ingroup perceptions model of recovery and examined how group value, group identification, and sense of community contribute to better clinical and personal recovery for people with mental illness through the mediation of self-stigma and empowerment. There were 258 people with mental illness completed a self-report questionnaire. Results of structural equation modeling revealed that the proposed model fit the data well, χ2(255) = 515.36, p < .001, comparative fit index (CFI) = .91, Tucker-Lewis index (TLI) = .90, root mean square error of approximation (RMSEA) = .063 (90% [confidence interval] CI [.055, .071]), standardized root mean square residual (SRMR) = .068. Group value was positively associated with group identification and negatively associated with self-stigma, which were in turn related to better clinical and personal recovery. Group identification and sense of community were associated with higher level of empowerment, which was positively associated with clinical and personal recovery. The present study extended research on ingroup perceptions by showing the effect of ingroup perceptions on recovery. It provided practical implications to mental health services by emphasizing the importance of fostering membership within mutual self-help groups and integrating peer-led services into existing mental health services system.