The authors believe that homelessness is a risk factor for emotional illness and they use the construct of psychological trauma--focusing on social disaffiliation and learned helplessness--to understand the potential effects of homelessness. The authors aver that psychological trauma is likely among homeless individuals and families for three reasons. (a) The sudden or gradual loss of one's home can be stressful enough to produce symptoms of psychological trauma. (b) The conditions of shelter life may produce trauma symptoms. (c) Many homeless people--particularly women--become homeless after experiencing physical and sexual abuse and consequent psychological trauma. Research suggests that negative psychological responses to traumatic events can be helped or even prevented by a supportive and empowering posttrauma environment. The implications of trauma theory for improving the psychosocial conditions of homeless people are discussed.