Background: The most basic cultural and moral barrier to the amelioration of global mental health problems continues to be the enormously negative, destructive, and almost universal stigma that is attached to mental illnesses, to patients with a mental illness and their families, and to mental health caregivers. The discrimination due to stigma is a major issue in the World Health Organization's agenda for the improvement of mental health care standards. While public stigmatization of mental illness exists as a well-recognized phenomenon with deleterious impact on the people with mental illness, studies have shown that the stigma an individual imposes on self is potentially more damaging than that inflicted by others. Aim: To determine the prevalence of internalised stigma and its association with disability among outpatients with schizophrenia attending the Neuropsychiatric Hospital, Aro, Abeokuta. Ogun State. Methods: The study was a hospital based cross-sectional observational study, 300 outpatients with schizophrenia from 18 to 64 years, attending the outpatient clinic of the Neuropsychiatric Hospital, Aro, Abeokuta were studied. The participants were administered the sociodemographic proforma, Mini International Neuropsychiatric Interview (M.I.N.I) PLUS, the internalised stigma of mental illness scale (ISMI), the brief psychiatric rating scale (BPRS) and the world health organization disability assessment schedule (WHODAS 2.0). All analyses were done using the Statistical Package for the Social Sciences version 20. Results: Mean age of respondents was 39.86±10.52. There were more females (53.5%) and 43.2% of respondents were married, mean BPRS score was 24.43± 7.49. Overall prevalence of high internalised stigma was 23.8%. Prevalence of disability was 82.2%. Sociodemographic variables and clinical characteristics associated with internalised stigma include level of education (p < 0.001), income (p = 0.01), number of admissions (p < 0.001) and level of psychopathology (p < 0.001). Clinical characteristics associated with disability were route of drug administration (p < 0.001) and level of psychopathology (p = 0.02). There was a significant association between internalised stigma and disability in the stigma resistance subscale (p = 0.04). Conclusion: This study showed that the prevalence of internalised stigma is high, associated with disability, and common among outpatients with schizophrenia. This key finding, could modify the treatment approach for outpatients with schizophrenia. Interventional programmes aimed at reducing internalised stigma in outpatients with schizophrenia should be implemented.