Background <p>Unemployed individuals with mental health issues frequently struggle to find re-employment. The relevance of self-stigma, that is, applying public stigma toward mental health issues to oneself, has been under-researched in this context, but might provide valuable insights into why finding re-employment is particularly challenging for these individuals. Drawing on the “why try” effect of self-stigma and the conservation of resources theory, we examined the associations between self-stigma, job-search self-efficacy, and job-search behavior, also considering the role of social inclusion, readiness to find employment, psychological distress, and having a diagnosed mental health condition.</p> Methods <p>As part of a wider intervention project, we collected baseline data via standardized questionnaires and structured interviews and applied both variable- and person-centered analysis approaches. Data were provided by 422 unemployed individuals with mental health issues in Germany.</p> Results <p>Variable-centered analysis indicated a negative indirect effect of self-stigma on job-search behavior through reduced job-search self-efficacy, supporting a domain-specific “why try” effect. This indirect effect was not conditional on other variables. Readiness to find employment, however, moderated the link between self-stigma and job-search self-efficacy with higher readiness exacerbating the negative association. Person-centered analysis identified four distinct profiles of unemployed individuals with mental health issues: Whereas two profiles showed mostly quantitative differences in the magnitude of the variable scores (i.e., low vs. high levels of self-stigma, psychological distress, and social inclusion), two profiles showed qualitatively distinct combinations of self-stigma and psychological distress. The four profiles also differed regarding job-search self-efficacy levels with more favorable profile compositions showing higher levels as opposed to less favorable profile compositions.</p> Conclusions <p>Our findings support the relevance of self-stigma for job-search self-efficacy and, indirectly, job search. Implications for research and practice, particularly in terms of possible interventions regarding self-stigma in the context of vocational rehabilitation, are discussed.</p> Trial registration <p>The wider intervention project has been registered with the German Clinical Trials Register: DRKS00029002 (registered on 11 May 2022).</p>