This prospective longitudinal study was designed to investigate the relationship between acute stress disorder (ASD) and the subsequent development of posttraumatic stress disorder (PTSD) in a population of severely injured hospitalised trauma survivors. Symptoms of ASD were assessed just prior to discharge in 307 consecutive admissions to a Level 1 Trauma Centre, with PTSD assessments completed at 3 and 12 months post-injury. A well-established structured clinical interview was adopted for both assessments. Only 1% of the sample met criteria for an ASD diagnosis (at a mean of 8 days post-injury), while the incidence of PTSD was 9% at 3 months and 10% at 12 months. Although all ASD symptom clusters contributed to the prediction of subsequent PTSD severity, logistic regression indicated that only re-experiencing and arousal predicted a categorical PTSD diagnosis. The dissociative symptoms that form the core of ASD were rarely endorsed and showed high specificity but low sensitivity, resulting in a high proportion of false negative diagnoses. Reducing the number of dissociative symptoms required for a diagnosis ameliorated, but did not resolve, the problem. In this particular population, the low sensitivity of the ASD diagnosis renders it a poor screening test for use in identifying high risk individuals for early intervention and prevention strategies.