In recent years, the term stigma has been widely applied to organizations. However, scholars have yet to advance a theoretically consistent definition or comprehensive theory of organizational stigma. The purpose of this paper is to define the construct of organizational stigma and provide a general theory that explains the conditions under which organizational stigmas are likely to arise, how this process unfolds, and the initial effects stigmas inflict on organizations. In doing so, we distinguish organizational stigma from both individual-level stigma and the organizational-level constructs of reputation, status, celebrity, and legitimacy. We then build upon multiple streams of research to develop a richer theoretical explanation of the roles social context, social processes, and social actors play in the origination and effects of an organizational stigma.