Dignity therapy (DT) is an evidence-based psychotherapeutic approach originally designed to alleviate emotional and existential distress in patients with terminal illnesses. While dignity therapy has been well documented in palliative care, emerging perspectives suggest that its principles such as promoting autonomy, meaning, and self-worth can be beneficial for persons with severe mental illness (SMI) who often experience stigma, identity loss, and existential suffering. Although severe mental illness and terminal illness are distinct conditions both may involve the profound psychological and existential challenges that affect personal dignity. This paper explores the philosophical foundations and therapeutic benefits of dignity therapy, with a particular focus on its potential application in mental health settings. It highlights the significance of preserving dignity in psychiatric care and emphasizes the need for compassionate, personcentered mental health support tailored to the lived experiences of the person with severe mental illness.