This study aimed to test the hypothesis that people with first-episode psychosis who are more mindful will have lower self-stigma, and hence better social functioning. Thirty-four participants experiencing first-episode psychosis completed self-report questionnaires, in a cross-sectional design. Consistent with the hypothesis, higher levels of mindfulness predicted lower self-stigma and better social functioning, and self-stigma statistically mediated the mindfulness → social functioning relationship. However, contrary to expectations, when symptom severity was included as a covariate, evidence of mediation was lost. Limitations and implications of these findings are discussed.