PurposeThis paper aims to investigate the local perspectives, based on culture and beliefs about peer stigma, consequences and strategies to reduce mental health stigma among adolescents in Indonesia.Design/methodology/approachThis study included 30 participants, including students, teachers, health professionals and lecturers. Two sessions of focus group discussions and 14 sessions of in-depth interviews were performed to collect the data. A qualitative content analysis was carried out, and some related themes and sub-themes were explored.FindingsThis study found that peer stigma was prevalent and negatively impacted the psychological, social and intellectual development of adolescents with mental disorders (MD) in Indonesian society. Five strategies to tackle peer stigma were proposed, including increasing mental health literacy (MHL), reducing the harmful effects of stigma, fostering a supportive social environment, expanding access to and improving the quality of mental health care and advocating for public health policies.Research limitations/implicationsMore qualitative research on the experiences and perspectives of victims, perpetrators and society concerning mental health stigma in adolescents is required to fully understand why stigma arises, what causative factors and repercussions it has, as well as how to deal with it.Practical implicationsPeer stigma still exists among adolescents. It has negative impacts on their mental and psychological well-being. MHL, social environment, the harmful effects of stigma, as well as mental health access and policy were concerns of this study. A school is a place where adolescents spend most of their social time. Schools play a vital part in the stigma-reduction program.Originality/valueMental health stigma among adolescents with MD is an issue that has potentially hindered mental health recovery. Anti-stigma intervention based on local perspectives is valuable in increasing the effectiveness and acceptance of interventions.