Posttraumatic stress disorder (PTSD) is one of the emblematic psychiatric conditions in contemporary public consciousness, indexing not only disordered minds, but also disordered human relations. With efforts currently mounting to refine criteria for the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-V), an important task is to re-examine the emotional foundations of trauma and their elaboration in social context. A body of clinical research on psychological trauma indicates that the emotion shame is central to the development and course of PTSD. However, current diagnostic criteria and bio-behavioral research do not account for these findings. In light of an emerging understanding of PTSD as a disturbance of affect systems (Stone, 1992), this paper proposes a novel theoretical model that describes how shame underlies peri-traumatic and posttraumatic experiences of threats to the social self. It first presents a rationale for investigating traumatic shame that draws on affect theory and current findings in PTSD research. Next, it discusses the foundations of shame in perceptions of status inferiority and failure to conform to normative expectations and their elaboration in PTSD. Then it describes psychological, social, and cultural domains that are critical for contextualizing shame meanings and expressions. Finally, it recommends revisions to the diagnostic criteria for PTSD in DSM-V.