Background: Mental illness exposes persons to stigma and this stigma also affects family caregivers of persons with mental illness. The objective of the study was to assess the prevalence of perceived stigma and associated factors among primary caregivers of children and adolescents with mental illness, Addis Ababa, Ethiopia. Methods: A cross-sectional study design and systematic random sampling technique were used to recruit 408 participants at St. Paul’s Hospital Millennium Medical College and Yekatit-12 Hospital Medical College, Addis Ababa, Ethiopia. We collected the data by face-to-face interview. Devaluation of Consumer Families Scale was used to measure perceived stigma. Patient Health Questionnaire-9 and Oslo-3 social support scale were the instruments used to assess the factors. Coded variables were entered into Epidata V.3.1 and exported to SPSS V.21 for analysis. Binary logistic regression was used for analysis. Result: A total of 408 participants were interviewed, with a response rate of 96.5%. The magnitude of perceived stigma was 38.5% with 95% CI (33.6-43.1). Majority (68.6%) of the respondents were female. In the multivariate logistic regression, being mother (AOR = 2.8, 95% CI: 1.59, 4.91), absence of other caregiver (AOR = 2.0, 95% CI: 1.15, 3.49), poor social support (AOR = 3.9, 95% CI: 1.59, 6.13), and symptoms of depression (AOR = 2.9, 95% CI: 1.88, 3.65) were factors significantly associated with perceived stigma. Conclusion: The prevalence of perceived stigma among primary caregivers of children and adolescents with mental illness was high. Being mother, absence of other caregiver, poor social support, and symptoms of depression were factors significantly associated with perceived stigma.