Background: The sexual identity of gay men is placed as the polar opposite of heterosexuality and as such is studied as a deviance from the norm. This study is focused on the experience of stigma by gay men in Penang as part of identity development. Method: A total of 33 gay men were identified using the snowballing method. Qualitative data via in-depth interviewing was the method of data collection. Respondents signed a consent form approved by the Ethics Committee of Universiti Sains Malaysia, Penang, Malaysia. Each respondent was then given a pseudonym to ensure confidentiality of the respondents' identity.. Each respondent was interviewed separately at a date, time and venue of their convenience and were asked identical open ended questions. Each interview was audio recorded, transcribed and analysed using content analysis matrix. Results: Stigma had positively or negatively affected the sexual identity of the respondents interviewed. At best stigma brought respondents' strength and courage and at its worst, it has brought out fear and recrimination. The common types of stigma reported by respondents were name-calling, the creation of "in-group" and "out-group" situations, bullying (being ridiculed) and religious prejudice. The stigma faced by the respondents had not resulted in activism and to an extent forced some of the respondents to conform (at least when in public) to society's expectations. Conclusion: Stigma had assisted in the development of sexual identity of the respondents. Sadly, it is stigma and not a more positive experience of socio-cultural interaction that had assisted in the development of sexual identity.