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Background Arabic-speaking refugee and migrant populations form a significant proportion of Australia’s population. Despite high levels of psychological distress among Arabic-speaking populations, low uptake of mental health services has been demonstrated. Evidence suggests poor levels of mental health literacy (MHL) and high levels of stigmatising attitudes among Arabic-speaking populations, which may act as barriers to help-seeking behaviours. This study aimed to explore the relationships between measures of mental illness stigma, socio-demographic factors and psychological distress, as well as to determine the factors associated with MHL (i.e., correct recognition of mental illness and knowledge of causes) among Arabic-speaking refugee and migrant populations in Australia. Methods Participants were recruited from non-government organisations in Greater Western Sydney that provided support services to Arabic-speaking migrants and/or refugees. As this study is nested within an interventional pilot study evaluating a culturally tailored MHL program, only the pre-intervention survey responses for 53 participants were utilised. The survey measured key aspects of MHL (i.e., recognition of mental illness, knowledge of causes), levels of psychological distress (using K10 scale), and stigmatising attitudes towards mental illness (using Personal Stigma Subscales and Social Distance Scale). Results The Personal Stigma subscale of ‘Dangerous/unpredictable’ was strongly positively correlated with participants’ K10 psychological distress scores and strongly negatively correlated with years of education completed. There were moderate negative correlations between two Personal Stigma subscales (‘Dangerous/unpredictable’ and ‘I-would-not-tell-anyone’) and the length of stay in Australia. Being female was associated with an increase in personal stigma demonstrated by higher scores for ‘I-would-not-tell-anyone’ subscale than males. Similarly, increase in age was associated with a decrease on scores of the personal stigma ‘Dangerous/unpredictable’. Conclusions While future research with larger sample size are needed, the study findings can be considered as adding to the evidence base on mental illness related stigma in Arabic-speaking populations. Further, this study provides a starting point in developing the rationale for why population sub-group specific interventions are required to address mental illness stigma and improve MHL among Arabic-speaking refugee and migrant populations in Australia.