The purpose of this study was to assess the extent to which self-esteem and depression mediated the influence of internalized stigma on life satisfaction among Korean out-of-school youths. Cross-sectional data on 318 youths provided information on perceived stigma, self-esteem, depression, life satisfaction, and personal characteristics. A multinomial logistic regression analysis was followed by structured path analysis to investigate the mediation effects. Internalized stigma was negatively associated with life satisfaction. Self-esteem significantly mediated the influence of stigma on depression and the influence of depression on life satisfaction. Further, stigma directly and significantly influenced depression. This study demonstrated that self-esteem and depression were important to the relationship between internalized stigma and life satisfaction. Implications for possible policies and programs with the aim of helping out-of-school youths to integrate and lead successful satisfying lives are discussed.