Background: Epilepsy is a neurological disorder that significantly impacts the daily lives of individuals, leading to psychological, social, and cognitive challenges. Despite advancements in its management, stigma remains a substantial issue for epilepsy patients. Objective: This study aimed to investigate the relationship between stigma, psychological flexibility, and positive and negative affect in patients with epilepsy. Methods: This cross-sectional study included 200 participants, with 100 epilepsy patients and 100 healthy individuals, aged 18 to 45 years, from four major cities in Punjab, Pakistan. Data were collected using convenience sampling. The instruments used were the Internalized Stigma of Mental Illness (ISMI) inventory (epilepsy version), the Cognitive Fusion Questionnaire (CFQ), the Acceptance and Action Questionnaire (AAQ-II), and the Positive and Negative Affect Schedule (PANAS). Data analysis was conducted using SPSS version 25. Descriptive statistics summarized the demographic and clinical characteristics, and independent samples t-tests were used to compare the groups. Results: Epilepsy patients had significantly higher levels of internalized stigma (ISMI total score: 84.05 ± 11.77) compared to healthy individuals (52.79 ± 13.67), t(198) = 17.33, p < 0.01. They also exhibited lower psychological flexibility (AAQ-II score: 39.23 ± 8.92 vs. 26.04 ± 10.07), t(198) = 9.81, p < 0.01, and higher cognitive fusion (CFQ score: 39.62 ± 9.19 vs. 27.56 ± 10.44), t(198) = 8.67, p < 0.01. Positive affect was lower in epilepsy patients (12.58 ± 4.13) compared to healthy individuals (15.30 ± 4.08), t(198) = 4.68, p < 0.01, while negative affect was higher (19.97 ± 4.51 vs. 14.89 ± 4.69), t(198) = -7.81, p < 0.01. Conclusion: The study demonstrated significant relationships between stigma, psychological flexibility, and affect in epilepsy patients. Addressing these factors is crucial for improving the psychological well-being and quality of life for individuals with epilepsy.