Background: The introduction of developmentally adapted criteria for posttraumatic stress disorder (PTSD) has improved the identification of ≤6-year-old children with clinical needs. Across two studies, we assess predictors of the development of PTSD in young children (PTSD-YC), including the adult-led acute stress disorder (ASD) diagnosis, and provide proof of principle for cognitive-focused therapy for this age range, with the aim of increasing treatment options for children diagnosed with PTSD-YC. Method: Study 1 (N = 105) assessed ASD and PTSD-YC diagnosis in 3-to 8-year-old children within one month and at around three months following attendance at an emergency room. Study 2 (N = 37) was a preregistered (www.isrctn.com/ISRCTN35018680) randomized controlled early-phase trial comparing CBT-3M, a cognitive-focused intervention, to treatment-as-usual (TAU) delivered within the UK NHS to 3to 8-year-olds diagnosed with PTSD-YC. Results: In Study 1, the ASD diagnosis failed to identify any young children. In contrast, prevalence of acute PTSD-YC (minus the duration requirement) was 8.6% in the first month post-trauma and 10.1% at 3 months. Length of hospital stay, but no other demographic or trauma-related characteristics, predicted development of later PTSD-YC. Early (within one month) diagnosis of acute PTSD-YC had a positive predictive value of 50% for later PTSD-YC. In Study 2, most children lost their PTSD-YC diagnosis following completion of CBT-3M (84.6%) relative to TAU (6.7%) and CBT-3M was acceptable to recipient families. Effect sizes were also in favor of CBT-3M for secondary outcome measures. Conclusions: The ASD diagnosis is not fit for purpose in this age-group. There was a strong and encouraging signal of putative efficacy for young children treated using a cognitive-focused treatment for PTSD, and a larger trial of CBT-3M is now warranted. Keywords: Posttraumatic stress disorder; young children; cognitive behavioral therapy; randomized control trial.Conflict of interest statement: See Acknowledgements for full disclosures.