The aim of the study was to describe the development and predictors of psychological adjustment during community-based traumatic brain injury (TBI) rehabilitation. Forty-two adolescent and adult individuals with TBI (mean age 32 years, 88% male, median post-traumatic amnesia 11 days) participated in a single-group, longitudinal design study. The main measures used were the Reactions to Impairment and Disability Inventory, Adjustment subscale; Sydney Psychosocial Reintegration Scale; Hospital Anxiety and Depression Scale; and Self-awareness of Deficits Interview. At rehabilitation start, individuals differed significantly from each other with respect to their level of psychological adjustment. Individual trajectories of psychological adjustment were highly variable. However, for the sample as a whole, psychological adjustment did not change during the course of rehabilitation (multilevel regression models; p > .05). Good psychological adjustment was related to low levels of emotional distress and a small discrepancy between current and aspired functional status. Poor functional status had a more minor impact on psychological adjustment in individuals with poor self-awareness than in individuals with high levels of self-awareness. The results confirm parts of theoretical models of psychological adjustment to acquired brain injury, especially the importance of goal refinement. However, the results need to be treated cautiously, given the limited sample size.