The consequence of social exclusion of the mentally ill patients is often a worsening of the course of the disease and prognosis. The psychiatric diagnosis is very important for the so-called labeling, which is one of the stages of the stigma process, and it also has a lot of social implications. The purpose of this work is to take look at the issue of psychiatric diagnosis, especially the diagnosis of paranoid schizophrenia and its consequences for the patient’s social functioning. The authors of the article have reviewed the literature on the importance of psychiatric diagnosis in the context of self-stigmatization of mental illness and have presented, based on medical records, a clinical case of a patient who had significant difficulties in accepting the diagnosis of paranoid schizophrenia. The stigma of mental illness is the reason of subjectively experienced suffering for people with psychiatric diagnosis and their relatives, but it is also relevant to public health. Psychiatric diagnosis has significant social consequences, which is why it is so important that the process of diagnosis is not a routine activity for psychiatrists, free from ethical reflection.