This study adopted a quasi-experimental design to compare the treatment outcomes of inpatient-outpatient programs and day hospital programs for chronic, combat-related posttraumatic stress disorder. Data were drawn from 202 Vietnam veterans who had completed treatment at four programs across Australia. The veterans were assessed on a range of psychological and social variables at intake to the programs and followed up at 3 and 9 months after discharge. A significant main effect was found for time, with veterans from both program models demonstrating improvements that were maintained over the 9-month follow-up period. Group by time effects were not significant, which suggests that inpatient-outpatient programs are not more efficacious than the less expensive day hospital alternatives. In line with current mental health policy directions, the current study lends broad support to the recommendation that treatment services for veterans with posttraumatic stress disorder be delivered in the least restrictive environment.