Neighbourhoods are vulnerable to being stigmatized with implications for residents' social networks, experiences of social connectedness, and opportunities for developing or accessing social capital. Goffman defined stigma as a discrediting attribute that impairs social acceptability. Poverty can be considered a discrediting attribute and stigma is experienced through negative labelling and stereotyping of the poor. Using qualitative data collected through interviews and participant observation in two impoverished suburbs in Victoria, Australia, this article explores experiences of neighbourhood, social networks and stigma as they are perceived by residents and people working in the neighbourhood. There was evidence of people being involved in supportive local bonding networks but few people were linked in bridging networks that extended outside the neighbourhood. Bridging networks are considered to be most effective for accessing valuable forms of social capital. The article considers social contexts for residents' networks for their potential to generate social capital. Contemporary contexts for the stigmatization of poverty and possibilities for 'destigmatizing' social groups and neighbourhoods are discussed.