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OBJECTIVE: Posttraumatic stress disorder (PTSD) is often comorbid with other psychiatric disorders but often goes unrecognized. The effects of PTSD comorbidity are unclear, especially in patients with severe mental illness. The authors assessed short-term clinical outcome in severely depressed psychiatric inpatients with and without comorbid PTSD. METHOD: From patients hospitalized between 1995 and 2000, all patients with depression and comorbid PTSD (N=587) were selected and matched with depressed patients without PTSD (N=587). Clinical outcome was assessed with a semistructured, physician-administered battery. Differences between the two groups were examined, with overall burden of psychiatric illness entered as a covariate in the analyses. RESULTS: Relative to depressed patients without PTSD, depressed patients with PTSD had, at discharge, greater psychiatric symptom severity and higher levels of depression and hostility. Depressed patients with comorbid PTSD also had a significantly higher rate of being discharged against medical advice (odds ratio=6.10, 95% CI 2.96–12.57). CONCLUSIONS: PTSD comorbidity correlates with poorer short-term clinical outcome and greater likelihood of discharge against medical advice in severely depressed psychiatric inpatients. Better recognition of PTSD comorbidity may improve overall care of these patients.