Individuals with chronic illnesses and those infected with SARS-CoV-2 often face stigma, shame, and psychological distress related to their conditions. Higher psychological flexibility and self-compassion are often associated with less stigma and shame. Examining and comparing these experiences between people with chronic illness and people who have recovered from SARS-CoV-2 can provide valuable insights into the shared and unique challenges they encounter. This study aimed to compare these two groups, and used structural equation modelling to investigate the links between stigma, shame, and psychological distress, with a focus on the mediating roles of psychological flexibility and self-compassion in these associations. The study included 270 Portuguese participants (chronic illness: n = 104; SARS-CoV-2: n = 166), with an average age of 36.73 years and 86.6% of the sample being women. Results showed that the chronic illness subgroup reported higher levels of illness stigma, anxiety, and depression, compared to the SARS-CoV-2 subgroup. Findings from the mediation analysis, revealed that the model fit exceptionally well, accounting for 48% of the variance in anxiety and 45% in depression symptoms across the entire sample. Most parameters were consistent between the two subgroups, except for the association between self-compassion and depression symptoms, which was only statistically significant in the chronic illness subgroup. In this group, both psychological flexibility and self-compassion mediated the association between stigma and shame with symptoms of anxiety and depression. In the SARS-CoV-2 subgroup, these processes mediated the association with anxiety, whereas psychological flexibility only mediated depression symptoms. The findings from this study provide directions for future research on the possible development or refinement of personalized psychological interventions targeting emotional distress in adults with chronic illnesses and viral disease recovery cohorts.