Examined strategies for developing effective interventions for clients who have both serious mental illness and trauma symptoms. The authors reviewed articles published between 1970-2000, assessed current practices, interviewed consumers and providers, and examined documents from consumer groups and state mental health authorities. Exposure to trauma, particularly violent victimization, is endemic among clients with severe mental illness. Multiple psychiatric and behavioral problems are associated with trauma, but posttraumatic stress disorder (PTSD) is the most common and best-defined consequence of traumInterviewees expressed concerns about possible underdiagnosis of PTSD, misdiagnosis of other psychiatric disorders among trauma survivors, incidents of retraumatization in the mental health treatment system, and inadequate treatment for trauma-related disorders. Valid assessment techniques for trauma and PTSD symptoms are not generally used by providers. PTSD is often untreated among clients with serious mental illness, or it is treated with untested interventions. The development of effective treatments for people with severe mental illness affected by trauma should begin with the testing of theoretically grounded interventions in controlled clinical trials.