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Purpose One in fourteen children in the United States experiences the incarceration of a parent with whom they have lived. Although prior research has established that witnessing the arrest of a parent is a common occurrence for children of criminal justice-involved parents, child outcomes following such an event are understudied. Little is known about the long-term impacts of witnessing an arrest on children and the extent to which they may vary by child age. Methods Using longitudinal data from the Parent Child Study of mothers and fathers incarcerated in state prison, we examine the witnessing of parental arrest as an acute traumatic event and identify the extent to which this type of trauma predicts externalizing and internalizing symptoms for children during their parents’ incarceration and following release. Results Witnessing a parent’s arrest predicted greater internalizing behavior concerns while parents were incarcerated, with a greater magnitude of effect for children under eight years of age. Six months post-release of the parent, children younger than age eight who witnessed the arrest showed significantly higher internalizing and externalizing behaviors. No effect was found for children ages eight years or older. Conclusion Implications for future policies to reduce the likelihood of children witnessing parental arrests, as well as the potential benefit of screening for trauma when working with children with incarcerated parents, are discussed.