Introduction Internalized stigma is prevalent among patients diagnosed with schizophrenia. Their family caregivers (FGs) also suffer from internalized stigma, but limited studies have addressed the issue. Aim The aim of this study was to determine the severity of internalized stigma and its correlates among FGs of patients diagnosed with schizophrenia in Changsha, Hunan, China. Methods A consecutive sample of 299 FGs was recruited at the psychiatric outpatient department of a tertiary hospital in Changsha. This study explored the relationships between internalized stigma and potential factors. Results Nearly 50% of the FGs perceived mild internalized stigma, 24% of the FGs reported moderate level, and 6% had a severe level. Internalized stigma was associated with patients’ characteristics (severity of illness) and FGs’ characteristics (hope, social support, passive coping, age, education background, residence with the patient, caring for a male or a young patient and difficulty in supervising medication). Discussion and implications for practice Informative and psychosocial interventions based on education and contact for FGs such as enhancing mental health literacy programs, cognitive therapies and group psychoeducation can provide FGs with a better understanding of schizophrenia and to promote hope, active coping and social support.