Stigma is an important topic in public health and has significant impact on psychological and physical well-being of stigmatized individuals. Emerging evidence has suggested that self-compassion, a self-caring and compassionate attitude in the face of hardship, may buffer the negative effects of stigma. However, little research has been conducted to investigate the underlying mechanisms through which self-compassion may buffer the effects of public stigma on self-stigma and the associated negative outcomes. The goal of this paper is to present a theoretical framework that integrates the existing body of literature in self-compassion and stigma. This framework postulates that (1) self-compassion may be related to adaptive cognitive, emotional, and social processes, and (2) these processes may, in turn, prevent individuals with stigmatized identity from developing self-stigma and other health outcomes. Theoretical and empirical support for this mediated-moderation model is reviewed. Future directions to empirically evaluate this model, as well the potential applications of this model for stigma reduction interventions are presented.