In the decade following the attack on the World Trade Center, over 2.3 million American military personnel were deployed to Iraq and Afghanistan. Lengthy tours of duty and multiple re-deployments were characteristic of these operations. Research findings demonstrate that prolonged exposure to combat increases the risk of developing posttraumatic stress disorder (PTSD). The current study was a randomized controlled clinical trial designed to assess the effectiveness of a novel intervention to treat combat-related PTSD in returning Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF) warfighters. A cognitive behavior treatment approach augmented with virtual reality exposure therapy (VRE) was developed, and administered for 10 treatment sessions over 5 weeks. Comparisons with a control group receiving minimal attention (MA) for 5 weeks revealed that the VRE group had significant reductions in the avoidance/numbing symptoms on the Clinician Administered PTSD Scale (CAPS). The VRE group also had significant reductions in guilt at post-treatment compared to the control group.