AbstractResearch on traumatic stress has focused largely on individual risk factors. A more thorough understanding of risk factors may require investigation of the contribution of neighborhood context, such as the associations between perceived neighbourhood disorder and social cohesion with reported trauma exposure (yes/no) and posttraumatic stress disorder (PTSD) diagnostic status (past‐year PTSD, remitted). To examine these associations, we used a cross‐sectional analysis of an epidemiological catchment area survey (N = 2,433). Visible cues, indicating a lack of order and social control in the community (neighbourhood disorder), were associated with increased trauma exposure (adjusted odds ratio [AOR] = 1.21, 95% confidence interval [CI] [1.12, 1.31]). For trauma‐exposed individuals, neighbourhood disorder was associated with greater odds of lifetime PTSD (AOR = 1.38, 95% CI [1.10, 1.75]), and the willingness of residents who realize common values to intervene for the common good (social cohesion), was associated with lower likelihood of past‐year PTSD (AOR = 0.64, 95% CI [0.42, 0.97]). For participants with a lifetime diagnosis of PTSD (including past‐year), increased social cohesion was associated with higher odds of remission (AOR = 2.59, 95% CI [1.55, 4.30]). Environmental contexts play a role in the development and progression of PTSD. As such, traumatic stress outcomes may be better understood through a perspective that integrates individual and contextual risk factors.