Recent models of cognition in Posttraumatic Stress Disorder (PTSD) predict that trauma-related, but not neutral, processing should be differentially affected in these patients, compared to trauma-exposed controls. This study compared a group of 50 patients with PTSD related to the war in Bosnia and a group of 50 controls without PTSD but exposed to trauma from the war, using the DRM method to induce false memories for war-related and neutral critical lures. While the groups were equally susceptible to neutral critical lures, the PTSD group mistakenly recalled more war-related lures. Both false and correct recall were related more to depression than to self-rated trauma. Implications for accounts of false memories in terms of source-monitoring are discussed.