The impact of combat operations in Iraq and Afghanistan on the incidence of post-traumatic stress disorder (PTSD) in military service members has been poorly quantified. The purpose of this study was to examine trends in the incidence rate of physician-diagnosed PTSD in active-duty military personnel between 1999 and 2008. We conducted a retrospective cohort study utilizing data extracted from the Defense Medical Surveillance System to identify incident cases of PTSD within the study population. The incidence rate of physician-diagnosed PTSD was the primary outcome of interest. Multivariable Poisson regression was used to analyze the data. The overall incidence rate of PTSD among all active-duty US military personnel was 3.84 (95% CI: 3.81, 3.87) cases per 1000 person-years. The adjusted average annual percentage increase in the incidence rate of PTSD prior to the initiation of Operation Iraqi Freedom (OIF) was a modest 5.02% (95% CI: 1.85, 8.29%). Following the initiation of OIF, the average annual percentage increase in the rate of PTSD was 43.03% (95% CI: 40.55, 45.56%). Compared to the baseline period between 1999 and 2002, the incidence rate of PTSD in 2008 was nearly 7 times higher (RR = 6.85, 95% CI: 6.49, 7.24). Significant increases in the incidence rate of PTSD were observed following the initiation of OIF regardless of sex, age, race, marital status, military rank, or branch of military service. Notably, the rate of PTSD among females was 6-7 times higher prior to OIF, but there was no difference by gender by 2008. Overall, these data quantify the significant increase in the incidence rate of PTSD following the initiation of combat operations in Iraq and Afghanistan within the active-duty military population during the study period.