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Identity is a complex concept that can be informed by various factors, involving biological, psychological, experiential, and social influences. Specifically, one’s social identity refers to the ways in which individuals can adopt attributes from established collective categories, like cultural identities, ethnic identities, gender identities, and class identities, amongst others. Social identity can encompass unique and diverse interactions at an individual level, known as micro-identities, that may be selectively expressed, hidden, or downplayed, contingent on distinct sociocultural settings. However, the formation of social identity is recurrently defined in opposition to perceptions of the Other, which can entail adverse paradigms of marginalisation, stigma, and discrimination. Although this theory of Otherness has been developed across different fields, particularly sociology, it may be important in psychiatric contexts as it can engender inherent risk factors and mental health inequalities. Consequently, this paper seeks to bring attention towards these issues, exploring the construction of Otherness and its detrimental outcomes for psychiatry, such as systemic discrimination and disparities in therapeutic support, alongside recommended initiatives to mitigate against the effects of Otherness. This may require multifactorial approaches that include cultural competency training, interventions informed by micro-identities and intersectionality, patient advocacy, and structural changes to mental health policy.