Background: People Living with HIV (PLHIV) experiencing stigma when accessing care will diminish their confidence in the healthcare system and may adversely affect the efforts for the prevention and halting of the HIV epidemic. This study aimed to assess the knowledge, attitudes and perceived practices (KAP) towards stigma of PLHIV among clinical undergraduates of a private medical college in South India. Materials and Methods: A cross-sectional study on clinical undergraduates aged between 18-20 years was undertaken in 2013 to evaluate the KAPs. The study sample of 200 was selected using purposive sampling method and a pre-tested structured questionnaire was used. Results: The mean age of the study participants was 19 years. The definition of stigma as per UNAIDS was correctly identified by 43% and concept of QQR-quality of virus, quantity of virus and route of transmission as determinants of acquiring HIV infection by only 17% of participants. Thirty-three percentage of participants mentioned fear of contagion and lack of correct knowledge about HIV transmission risks, judgmental behaviors and myths and misconceptions-17% each among health care workers (HCW) as the reasons for stigma towards PLHIV in healthcare settings. Participants stated provision of separate beds and wards-93%, mandatory HIV testing without consent for surgeries-68%, and 7% expressed they would be ashamed to be identified as HIV care providers. Conclusions: Clinical undergraduates demonstrated very poor knowledge and alarming negative attitudes about stigma towards PLHIV in healthcare settings. Educational programs are to be included urgently in the medical curriculum to promote non-stigmatizing attitudes towards PLHIV in healthcare settings.