Labeling theory suggests that contact with the criminal justice system leads to feelings of stigmatization, which will consequently have the counterproductive effect of increasing offending. The current study investigated this phenomenon by (a) interviewing 394 young people sentenced in the New South Wales Children’s Court about their emotional reactions to the experience and (b) testing whether differences in these emotional reactions were related to increases or decreases in reoffending. It was found that feeling stigmatized after the hearing was a significant predictor of reoffending for the young women, but not the young men, in the sample. In addition, young men with previous convictions who reported feeling stigmatized were less likely to reoffend. The implications of these findings for the way in which young offenders are treated are discussed.