Models of personality disorders have overwhelmingly developed in a socially decontextualized manner. Some historical models of personality pathology formally embraced the interactions between the individual and their environment. However, the field of personality disorder theory, research, and treatment has evolved in a manner that situates dysfunction within intra-individual deficiency processes, inadvertently downplaying the impact of environmental context. By doing so the field limits its applicability to populations that do not represent the norm in clinical psychological science. Assumptions about personality disorders conflict with evidence-based ways of understanding psychosocial dysfunction among minoritized populations. Using research on sexual and gender minority populations, and the detrimental impact of minority stress, we discuss how sociocultural context is inextricably linked to psychosocial functioning, which remains at odds with personality disorder theory and research. We will first briefly review the historical roots of personality disorder theory; explore how sociocultural context is currently instantiated in official nosologies as the Diagnostic and Statistical Manual (DSM) and the Psychodynamic Diagnostic Manual (PDM); and illustrate how intra-individual personality disorder conceptualization fails to align with the accepted understanding of how minority stress impacts the health of sexual and gender minority populations. Finally, we end with a few recommendations for (1) future research on personality disorders and (2) clinical work with sexual and gender minority individuals who might demonstrate behaviors typically associated with a personality disorder diagnosis.