Acute stress disorder (ASD) was included as a diagnosis to the 4th edition of the "Diagnostic and Statistical Manual" (American Psychiatric Association, 1994) as a way of describing pathological reactions in the first month following a trauma. Since that time, ASD has been the focus of some controversy, particularly regarding the theoretical basis and practical utility of the disorder. Despite this controversy, ASD has demonstrated usefulness in identifying individuals experiencing a high level of distress in the acute aftermath of a trauma as well as those at risk for developing posttraumatic stress disorder (PTSD). This paper reviews the clinical application of ASD, the current controversy surrounding its conceptual basis, and then discusses the dilemmas regarding this diagnosis that might occur in clinical practice. A review of the randomized control trial treatment outcome literature for ASD is also included in an effort to assist clinicians selecting interventions for clients recently exposed to traumatic events. Throughout this paper, the relationship between research and applied clinical practice is highlighted. (Contains 1 table.)