Life-threatening illness has recently been recognized as a stressor that can precipitate posttraumatic stress disorder (PTSD). This development has raised questions over the extent to which the PTSD diagnosis is applicable to the psychological reaction to being diagnosed with cancer. This paper identifies the core conceptual issues pertaining to cancer-related PTSD, critically reviews the empirical literature on PTSD following cancer, and considers the possible mechanisms and course of PTSD following a diagnosis of cancer. Specific issues that need to be considered in the assessment and treatment of cancer-related PTSD are reviewed. This review highlights that there is a need for stronger empirical base to guide clinical management of PTSD in cancer patients.