With about 1200 individuals murdered, the massacre of October 7th was one of the deadliest terrorist attacks in modern history. The mental health consequences of terrorist attacks have been documented. However, little is known of the impact of the potentially morally injurious experience (PMIE) of betrayal––in which individuals feel betrayed by leaders they once trusted––on levels of psychological burden in the aftermath of such an attack. In this national prospective cohort study, we examined to what extent the PMIE of betrayal exacerbates the risk for posttraumatic stress disorder (PTSD) and depression in the wake of the October 7th terrorist attack. A representative sample of 710 Israeli adults (362 female, 51.1%), Jews (557, 79.9%) and Arabs (153, 20.1%), aged 18–85 (M = 41.01, SD = 13.72) completed validated self-report questionnaires assessing PTSD, depression, and PMIE-betrayal at two timepoints: T1, in August 2023 (6–7 weeks before the attack) and T2, in November 2023 (5–6 weeks after the attack). In two hierarchical logistic regressions, we found that experience of PMIE-betrayal predicted diagnoses of both PTSD (OR 1.92, 95% CI 1.26–2.92) and depression (OR 2.03, 95% CI 1.37–3.01) at T2, beyond probable PTSD/depression at T1 and demographic and trauma-related variables. Moreover, in two repeated-measure analyses predicting PTSD/depression symptoms, we found significant interactions between PTSD/depression trajectories and PMIE-betrayal, meaning that the increase of PTSD/depression symptoms was significantly higher among participants experiencing betrayal in the context of the attack. Our study highlights the impact of PMIE of betrayal on the dramatic increase in psychopathology following the October 7th terror attack on Israel’s population. Clinicians treating individuals coping with PTSD and depression should attend to their patients’ possible exposure to betrayal following the attack. Moreover, national leaders and policymakers should take significant steps to repair the public’s betrayal experience.