This study investigated the predictors of posttraumatic stress disorder (PTSD) following a diagnosis of cancer. Individuals who were recently diagnosed with 1st onset head and neck or lung malignancy (N = 82) were assessed within 1 month of diagnosis for acute stress disorder (ASD) and other psychological responses including depression; individuals were reassessed (N = 63) for PTSD 6 months following their cancer diagnosis. At the initial assessment ASD was diagnosed in 28% of participants, and 22% met criteria for PTSD at 6-months follow-up. Peritraumatic dissociative symptoms at the time of receiving one's cancer diagnosis was the sole predictor of PTSD severity at 6-months follow-up. Elevated dissociative symptoms and greater distress at the initial assessment were the best predictors of PTSD caseness at 6-months follow-up. This study provides evidence for identifying recently diagnosed cancer patients who may benefit from psychological assistance in order to prevent chronic psychopathology.