A goal of clinical trials is to identify unique baseline characteristics that can inform treatment planning. One such target is emotion dysregulation (ED), which contributes to the maintenance of co-occurring posttraumatic stress disorder (PTSD) and substance use disorder (SUD) and may be a potential moderator of treatment response. We examined the moderating impact of ED severity on treatment outcomes in an urban, socioeconomically disadvantaged, and racially/ethnically diverse sample with complex trauma and severe SUDs. Participants with co-occurring PTSD and SUD (PTSD+SUD) were randomized to Concurrent Treatment with Prolonged Exposure (COPE, n = 39), Relapse Prevention Therapy (RPT, n = 43), or an active monitoring control group (AMCG, n = 28). Baseline ED severity moderated treatment outcomes such that high ED was associated with greater reduction in PTSD severity among those who received COPE relative to RPT and AMCG. In contrast, low ED was associated with greater reduction in substance use among those in RPT relative to COPE and AMCG. Implications for individualizing and optimizing treatment selection for PTSD+SUD are discussed.