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Dissociation, a disruption or discontinuity in psychological functioning, is often linked with worse psychiatric symptoms; however, the prognostic value of dissociation after trauma is inconsistent. Determining whether trauma-related dissociation is uniquely predictive of later outcomes would enable early identification of at-risk trauma populations. The authors conducted the largest prospective longitudinal biomarker study of persistent dissociation to date to determine its predictive capacity for adverse psychiatric outcomes following acute trauma.All data were part of the Freeze 2 data release from the Advancing Understanding of Recovery After Trauma (AURORA) study. Study participants provided self-report data about persistent derealization (N=1,464), a severe type of dissociation, and completed a functional MRI emotion reactivity task and resting-state scan 2 weeks posttrauma (N=145). Three-month follow-up reports were collected of posttraumatic stress, depression, pain, anxiety symptoms, and functional impairment.Derealization was associated with increased ventromedial prefrontal cortex (vmPFC) activation in the emotion reactivity task and decreased resting-state vmPFC connectivity with the cerebellum and orbitofrontal cortex. In separate analyses, brain-based and self-report measures of persistent derealization at 2 weeks predicted worse 3-month posttraumatic stress symptoms, distinct from the effects of childhood maltreatment history and current posttraumatic stress symptoms.The findings suggest that persistent derealization is both an early psychological and biological marker of worse later psychiatric outcomes. The neural correlates of trauma-related dissociation may serve as potential targets for treatment engagement to prevent posttraumatic stress disorder. These results underscore dissociation assessment as crucial following trauma exposure to identify at-risk individuals, and they highlight an unmet clinical need for tailored early interventions.