Childhood and adolescent psychiatric rehospitalizations are prevalent and overtaxing for patients, their families, and healthcare systems and can in themselves be traumatic to all parties involved. Understanding their causes is crucial to reduce this burden. This narrative literature review investigates the growing evidence identifying history of interpersonal trauma—defined as a type of trauma that occurs between people by acts of commission or omission, such as abuse, neglect, and bullying—as a risk factor for psychiatric rehospitalization among children and adolescents. The literature review was conducted on PubMed with the following key terms: (childhood OR adolescent OR children) AND (readmission OR rehospitalization) AND ([(interpersonal OR mental OR psychiatric) AND trauma)] OR PTSD). Three independent reviewers screened for eligible studies that discussed interpersonal trauma and psychiatric rehospitalization risk in patients aged 0 to 18 years. PubMed queries yielded 63 records with the key terms. After 3 independent reviews, 4 eligible records were found. Among the 4 retrospective studies with sample sizes between 100 and 783, three studies reported that children and adolescents who experienced neglect, bullying, physical abuse, or sexual abuse had higher psychiatric rehospitalization rates than those without. The fourth study found no significant association between interpersonal trauma and psychiatric rehospitalization but stated that underreporting of childhood interpersonal trauma may attribute to this lack of significance. All 4 studies focused on diagnosis of PTSD to account for trauma, while some, but not all, took into consideration family structure, history of abuse, and further mental health diagnosis. Current literature is limited but supports the interpretation that interpersonal trauma history is a risk factor for psychiatric rehospitalization among children and adolescents. However, the degree to which various factors, such as age, number of traumas, and types of interpersonal trauma experienced, impact this relationship remains unknown. Therefore, further studies are warranted to explore and elaborate on such elements in this emerging association.