This study examines the cross-lagged relationships between posttraumatic distress symptoms and physical functioning, using a sample of 413 persons who were hospitalized for injuries resulting from community violence. Posttraumatic distress was assessed at 1 week, 3 months, and 12 months postinjury, and posttraumatic physical functioning was assessed at 3 months and 12 months. Structural equation modeling was used to assess the prospective relationship between posttraumatic distress symptoms and physical functioning while controlling for demographic characteristics and objective measures of injury severity. Results indicate that posttraumatic distress and physical functioning are reciprocally related. Individuals with high levels of psychological distress at 1 week posttrauma have worse physical functioning at 3 months. Psychological distress at 3 months was not significantly associated with subsequent change in physical functioning at 12 months. Individuals with poor physical functioning at 3 months had higher than expected levels of psychological distress at 12 months. These findings demonstrate a reciprocal relationship between physical and mental health following traumatic injury. Interventions targeting physical recovery may influence subsequent mental health, and therapies aimed at improving early mental health may also have long-term benefits for physical recovery. (Contains 2 tables, 1 figure and 2 footnotes.)