The present study explores stigma against rural‐to‐urban migrants in China, drawing on a dialogical approach. It investigates the processes of stigmatization from two sides: that of the stigmatizer and that of the stigmatized. Open‐ended individual interviews were conducted with 138 participants (60 urban residents and 78 rural‐to‐urban migrants) in Tianjin, China. Findings from this study indicate that migrants were stigmatized by urban residents as having an unattractive physical appearance, potential perils of disease or crime, and discredited places of origin. Such stigma was embedded in China's unique hukou system and generated from a social categorization of superior and inferior groups. Migrants reported a number of coping strategies to counter such stigma: blaming fate, stigma reversal and upward mobility. However, migrants did not view themselves contemptuously and expressed positive feelings about their lives as migrants. They regarded internal migration as a way of pursuing happiness. Overall, urban residents stigmatized migrants legitimated by the hukou system, while migrants were surprisingly resilient against stigma, and did not internalize it, due to their economics‐driven internal migration. This study underscores that stigma in a given society is dialogically interdependent with its socio‐cultural context and that the perspectives of both the stigmatizer and the stigmatized need to be taken into consideration. Copyright © 2013 John Wiley & Sons, Ltd.