Introduction Patients with COVID‐19 often suffer from psychological problems such as post‐traumatic stress disorder (PTSD) and self‐stigmatization that may negatively impact their quality of life and sleep. This study examined mental health as a potential mediating factor linking self‐stigmatization and PTSD to quality of life and sleep. Methods Using a cross‐sectional design, 844 people who had recovered from COVID‐19 were called and interviewed. Data were collected using structured scales. Structural equation modeling was applied to assess fitness of a mediation model including self‐stigma and PTSD as independent factors and quality of life and insomnia as dependent variables. Results Mental health, COVID‐19‐related self‐stigma, and mental quality of life were associated. Insomnia, PTSD, and COVID‐19‐related self‐stigma displayed significant direct associations (r = .334 to 0.454; p < .01). A mediation model indicated satisfactory goodness of fit (CFI = 0.968, TLI = 0.950, SRMR = 0.071, RMSEA = 0.068). Mental health as a mediator had negative relationships with COVID‐19‐related self‐stigma, PTSD, and insomnia and positive associations with quality of life. Conclusion Mental health may mediate effects of COVID‐19‐related self‐stigma and PTSD on quality of life and insomnia. Designing programs to improve mental health among patients with COVID‐19 may include efforts to reduce negative effects of PTSD and COVID‐19‐related self‐stigma on quality of life and insomnia. COVID‐19 may result in having post‐traumatic stress disorder (PTSD) and self‐stigma. COVID‐19 may induce mental health problems and insomnia. Mental health mediated the association between self‐stigma and insomnia. Mental health mediated the association between PTSD and insomnia.