Stigma and discrimination toward individuals experiencing homelessness and mental disorders remain pervasive across societies. However, there are few longitudinal studies of stigma and discrimination among homeless adults with mental illness. This study aimed to identify the two-year group trajectories of stigma and discrimination and examine the predictive role of mental health characteristics among 414 homeless adults with mental illness participating in the extended follow-up phase of the Toronto At Home/Chez Soi (AH/CS) randomized trial site. Mental health-related perceived stigma and discrimination were measured at baseline, one, and two years using validated scales. Group-based-trajectory modelling was used to identify stigma and discrimination group trajectory memberships and the effect of the Housing First treatment (rent supplements and mental health support services) vs treatment as usual on these trajectories. The associations between mental health-related characteristics and trajectory group memberships were also assessed using multinomial logistic regression. Over two-years, three group trajectories of stigma and discrimination were identified. For discrimination, participants followed a low, moderate, or increasingly high discrimination group trajectory, while for stigma, participants followed a low, moderate or high stigma group trajectory. The Housing First treatment had no significant effect on discrimination or stigma trajectories groups. For the discrimination trajectories, major depressive episode, mood disorder with psychotic features, alcohol abuse, suicidality, severity of mental health symptoms, and substance use severity in the previous year were predictors of moderate and increasingly high discrimination trajectories. History of discrimination within healthcare setting was also positively associated with following a moderate or high discrimination trajectory. For the stigma trajectories, substance dependence, high mental health symptoms severity, substance use severity, and discrimination experiences within healthcare settings were the main predictors for the moderate trajectory group; while substance dependence, suicidality, mental health symptom severity, substance use severity and discrimination experiences within health care setting were also positive predictors for the high stigma trajectory group. Ethno-racial status modified the association between having a major depression episode, alcohol dependence, and the likelihood of being a member of the high stigma trajectory group. This study showed that adults experiencing mental illness and homelessness followed distinct stigma and discrimination group trajectories based on their mental health-problems. There is an urgent need to increase focus on strategies and policies to reduce stigma and discrimination in this population.