OBJECTIVE To investigate the relationship of psychiatric functioning with psychosocial functioning at 1 year following traumatic brain injury (TBI), after controlling for relevant demographic, injury-related, and concurrent factors. METHODS Prospective 1-year longitudinal study. METHODS Participants were 122 individuals with TBI and 88 proxy informants. METHODS Rehabilitation hospital. METHODS The Structured Clinical Interview for DSM-IV-TR (Diagnostic and Statistical Manual of Mental Disorders (Fourth Edition, Text Revision)) Axis I Disorders, Hospital Anxiety and Depression Scale, Sydney Psychosocial Reintegration Scale, and Glasgow Outcome Scale--Extended. RESULTS At 1 year postinjury, occupational activities were the area of most change after TBI followed by interpersonal relationships and independent living skills, according to the Sydney Psychosocial Reintegration Scale. The majority of participants were rated as having moderate disability on the Glasgow Outcome Scale--Extended. After controlling for relevant background factors, preinjury, acute postinjury, and concurrent psychiatric disorders were significantly related to 1-year psychosocial outcome. CONCLUSIONS Screening in the acute postinjury stage for presence of preinjury psychiatric history or current distress may help identify individuals who require more intensive rehabilitation and psychiatric support and more active postdischarge monitoring. Further research exploring potential causal mechanisms for these findings is required.