Structural discrimination against psychiatric patients may occur as a result of distribution of resources in the health system. We examine whether familiarity with mental illness, which reduces discrimination on the individual level, also moderates the approval of structural discrimination in health care funding. We conducted a representative survey of the German population (N=5025) in 2001 using a fully structured personal interview, including a measure of preferences for the allocation of health resources and an assessment of familiarity with mental illness. The approval of structural discrimination was inversely related to the individual's familiarity with mental illness in depression and, to a lesser extent, in schizophrenia. This relationship was absent for alcoholism and generally weak for contacts to mentally ill persons outside one's own family. Strategies successful in reducing individual discrimination are thus not necessarily suitable for combating structural discrimination and need to be tailored to their specific target.