Psychiatric service dog placements may benefit psychosocial functioning for veterans with posttraumatic stress disorder (PTSD), however, these effects have never been examined directly in daily life. This nonrandomized longitudinal clinical trial quantified the efficacy of psychiatric service dogs for daily psychosocial functioning among N = 168 veterans with PTSD using ecological momentary assessment (EMA). EMA data were collected twice daily for 2 weeks at each assessment period (0 and 3 months), totaling 9,408 survey responses (2 Assessments × 14 Days × 2 Prompts × 168 Participants). At follow-up, regression analysis identified associations between service dog placement and better perceived social interaction quality (β = 0.42, p < .05), better affect (negative affect: β = -2.64, p < .001; positive affect: β = 2.44, p < .001), and lower odds of panic attacks (OR = 0.68, p < .05). Social participation results were mixed: placements were associated with greater activity participation (β = 3.21, p < .001) but lower odds of being away from home (OR = 0.77, p < .05), indicating possible support for anecdotes that public stigma is an obstacle to community participation. Results further revealed that the service dog's trained tasks may be particularly important for social functioning outcomes, and the service dog's presence for emotional functioning outcomes. Findings highlight a need for education surrounding service dog etiquette and reveal potential mechanisms underlying psychiatric service dog placements. (PsycInfo Database Record (c) 2023 APA, all rights reserved).