Posttraumatic Stress Disorder (PTSD) remains a salient and debilitating problem, in the general population and for military veterans in particular. Several psychological and pharmacological treatments for PTSD have evidence to support their efficacy. However, the lack of comparative effectiveness data for PTSD treatments remains a major gap in the literature, which limits conclusions that can be drawn about which of these treatments work best. The current study will compare the effectiveness of PTSD treatments with the strongest evidentiary support - Prolonged Exposure (PE) therapy and pharmacotherapy with paroxetine or venlafaxine - as well as the combination of these two treatments. A randomized trial will be conducted with a large, diverse sample of veterans with PTSD (N = 300) recruited from 6 VA Medical Centers throughout the US. Participants will complete baseline assessments, followed by an active treatment phase (involving up to 14 sessions of PE and/or medication management) with mid (7 week) and posttreatment (14 week) assessments, and follow-up assessments at 27 and 40 weeks. Study outcomes will include PTSD severity, depression, quality of life and functioning, assessed via clinical ratings and self-report measures. Further, a range of demographic and clinically relevant variables (e.g., trauma type/number, resilience) will be collected at baseline and examined as potential predictors or moderators of treatment response, addressing another gap in the PTSD treatment literature. These data will be used to develop algorithms from predicting the optimal treatment for individual patients (i.e., personalized advantage indices; PAIs). Effectiveness of the treatments will be compared using multilevel modeling. PAIs will be developed by conducting bootstrapped analyses to select variables that predict or moderate outcomes (clinician rated PTSD severity at Week 14), followed by jacknife analyses to determine the magnitude of the predicted difference (representing an individual's predicted advantage of one treatment over the others).