Background Stigma affects not only people with mental illnesses, but their families as well. Understanding how stigma affects family members in terms of both their psychological response to the ill person and their contacts with psychiatric services will improve interactions with the family. Aims To investigate factors of psychological significance related to stigma of the relatives. Method In a Swedish multi-centre study, 162 relatives of patients in acute psychiatric wards following both voluntary and compulsory admissions were interviewed concerning psychological factors related to stigma. Results A majority of relatives experienced psychological factors of stigma by association. Eighteen per cent of the relatives had at times thought that the patient would be better off dead, and 10% had experienced suicidal thoughts. Stigma by association was greater in relatives experiencing mental health problems of their own, and was unaffected by patient background characteristics. Conclusions Interventions are needed to reduce the negative effects of psychological factors related to stigma by association in relatives of people with mental illness.