Physical trauma to the brain has always been known to affect brain functions and subsequent neurobiological development. Research primarily since the early 1990s has shown that psychological trauma can have detrimental effects on brain function that are not only lasting but that may alter patterns of subsequent neurodevelopment, particularly in children although developmental effects may be seen in adults as well. Childhood trauma produces a diverse range of symptoms and defining the brain's response to trauma and the factors that mediate the body's stress response systems is at the forefront of scientific investigation. This paper reviews the current evidence relating psychological trauma to anatomical and functional changes in the brain and discusses the need for accurate diagnosis and treatment to minimize such effects and to recognize their existence in developing treatment programs.