Little is known about the experience and impact of intersectional stigma experienced by rural young people (15–25 years) who have a parent with mental health challenges. The StigmaBeat project employed a co-design approach to create short films to identify and challenge mental health stigma from the perspective of young people who have experienced this phenomenon. The aim of this paper is to describe the co-design methodological approach used in StigmaBeat, as an example of a novel participatory project. We describe one way that co-design can be employed by researchers in collaboration with marginalised young people to produce films aimed at reducing mental health stigma in the community. Through describing the processes undertaken in this project, the opportunities, challenges, and tensions of combining community development methods with research methods will be explored. Co-design with young people is a dynamic and engaging method of collaborative research practice capable of harnessing lived experience expertise to intervene in social issues and redesign or redevelop health services and policies. The participatory approach involved trusting and implementing the suggestions of young people in designing and developing the films and involved creating the physical and social environment to enable this, including embedding creativity, a critical element to the project’s methodological success. Intensive time and resource investment are needed to engage a population that is often marginalised in relation to stigma discourse.