ABSTRACT Objective Theoretical and conceptual models of posttraumatic stress disorder (PTSD) symptom progression in youth have identified social functioning as having a central influence. Yet a dearth of research has examined the bidirectional temporal associations between PTSD symptoms and social functioning. Method This study is the first to investigate these temporal dynamics in a sample of adolescents in trauma-informed residential treatment (N= 453; M age = 15.77 [range = 12.12–18.95], SD = 1.55; 57.2% female). The UCLA PTSD Reaction Index for DSM-5 was analyzed as a measure of youth-reported PTSD symptoms and the Interpersonal Problems subscale of the Children’s Depression Inventory, 2nd edition was analyzed as a measure of youth-reported social functioning issues. The Social Problems subscale from the Child Behavior Checklist was analyzed as a measure of clinician-reported social functioning difficulties. Measures were completed at baseline and then approximately every three months for the duration of treatment. Multivariate lagged analyses were used to examine the temporal, bidirectional associations between PTSD symptoms and social functioning. Results Results indicated that while controlling for length of stay, trauma exposure, age, and gender, reductions in PTSD symptoms predicted subsequent reductions in social functioning problems across both measures (prs = .12-.16), and that improvement in interpersonal relationships predicted subsequent decreases in PTSD symptoms (pr = .12). Conclusions Taken together, these findings highlight the importance of healthy social relationships for decreasing adolescent’s psychological distress. Treatments that include components that target social functioning in addition to symptom reduction may maximally benefit youth with trauma-related psychopathology.