Objectives: To report the rate of acute stress and posttraumatic stress among children and parents following PICU admission and the relation between family function and posttraumatic stress. Design: Prospective, longitudinal, multi-informant observational study. Pediatric patients (n = 69) and parents were recruited in the ICU. They completed measures evaluating acute stress and posttraumatic stress during their hospitalization and at 3-month follow-up. Parents completed measures of family functioning during the hospitalization. Pearson correlations and multiple regression models were used to examine the relations between family functioning and acute stress and posttraumatic stress. Setting: An academic, urban, pediatric hospital in California. Patients: Children, 8–17 years old, admitted to the PICU for greater than 24 hours and their English- or Spanish-speaking parents. Interventions: None. Measurements and Main Results: All children endorsed acute stress during their PICU admission, with 51% meeting criteria for acute stress disorder. At 3-month follow-up, 53% of the children continued to endorse posttraumatic stress with 13% meeting criteria for posttraumatic stress disorder. Among parents, 78% endorsed acute stress during admission with 30% meeting criteria for acute stress disorder, and at follow-up, 35% endorsed posttraumatic stress with 10% meeting criteria for posttraumatic stress disorder. In multiple linear regression modeling, child acute stress significantly predicted child posttraumatic stress (β = 0.36; p < 0.01). In the parent model, parent acute stress (β = 0.29; p < 0.01) and parent education (β = 0.59; p < 0.00) positively predicted parent’s posttraumatic stress. Family function was not a predictor of either’s posttraumatic stress. Conclusions: Both children and parents have alarmingly high rates of acute stress and posttraumatic stress following the child’s PICU admission. Although family function did not emerge as a predictor in this study, further understanding of the influence of the family and the interplay between child and parent posttraumatic stress is needed to improve our understanding of the model of development of posttraumatic stress in this population to inform the intervention strategies.