As a result of the precarious conditions in which they migrate, refugees are likely to have experiences that increase their risk of mental health problems. Refugees tend to be predisposed to relatively high levels of distress upon resettlement, and a key predictor of these issues is traumatic experiences that occur before their arrival. Despite high initial levels of ill-health, on average, refugees tend to experience mental health recovery over time. However, both levels of mental health upon settlement and recovery over time may be negatively influenced by stressors in the postsettlement period. The present study examined changes in psychological distress and posttraumatic stress symptoms over 5 years among 2,169 refugees from various backgrounds, predominately from Iraq and Afghanistan, who participated in the Building a New Life in Australia (BNLA) study. A multivariate latent growth curve model found mental ill-health decreased on average, β = −.21 for distress and β = −.31 for PTSD, ps < .001, and premigration trauma exposure predicted more initial PTSD symptoms and reduced recovery over time, β Intercept = .21, β Slope = −.54, p < .001. Postmigration stressors, such as loneliness, financial concerns, and cultural integration, predicted higher levels of mental health problems as well as reduced recovery over time. These findings suggest that beyond trauma exposure, the mental health of refugees upon resettlement and their recovery over time is impacted by stressors in the early resettlement period, which has important implications for interventions and services to support and encourage well-being in refugee populations.