Drawing on modified labeling theory and the reflected appraisals process and using longitudinal data from 129 mothers and their adult children with schizophrenia, we estimate models of the effects of mothers' stigmatized identity appraisals of their mentally ill children on reflected and self-appraisals, and how appraisals affect outcomes (symptoms, self-efficacy, life satisfaction). Results indicate that initial symptoms and functioning are related to how significant others think about their ill family members, how persons with mental illness think others perceive them, and how they perceive themselves. Part of the effects of initial symptoms and functioning on reflected appraisals are due to mothers' appraisals. A small part of the effects of outcomes on self-appraisals are due to others' and reflected appraisals. Stigmatized self-appraisals are related to outcomes, but reflected appraisals do not affect outcomes directly. Implications for modified labeling theory and social psychological processes in recovery from mental illness are discussed. (Contains 1 figure, 4 tables, and 6 footnotes.)