Background <p>This study, grounded in Self-Determination Theory (SDT), explores the role of autonomy-supportive neighborhoods in reducing public stigma among veterans with mental illnesses. It aims to (1) validate the Neighborhood Climate Questionnaire (NCQ) and (2) evaluate the relationship between neighborhood climate, mental health symptoms, and public stigma within a sample of U.S. veterans with mental illness.</p> Methods <p>A cross‑sectional sample of 156 U.S. veterans with self‑reported mental illnesses completed measures of neighborhood climate, well‑being, depression, functional limitations, and public stigma. An exploratory factor analysis and Cronbach’s alpha were used to examine the psychometric properties of NCQ. Hierarchical multiple regression analysis examined the association between neighborhood climate and public stigma after controlling for demographic and clinical variables.</p> Results <p>Exploratory factor analysis supported a one‑factor structure of the NCQ, accounting for 84% of the variance, with excellent internal consistency (α = 0.97). In regression analysis, greater autonomy‑supportive neighborhood climate was significantly associated with lower public stigma (β = −0.21, <i>p</i> &lt; .05), beyond demographic characteristics, functional limitations, and depression.</p> Conclusion <p>These findings highlight the need for community-based interventions to foster autonomy support, improve social integration, and reduce stigma-related barriers to mental health care. Future research should explore regional differences and longitudinal effects.</p> Trial registration <p>N/A.</p> Clinical trial number <p>NA.</p>