The phenomenon of “posttraumatic play” (PTP) has received much clinical recognition and little empirical support. The objective of this study was to examine various aspects of PTP in young children exposed to terror events and their relation to posttraumatic stress disorder (PTSD). Individual play sessions, conducted with 29 young Israeli children directly exposed to terrorism (M age = 5.47, SD = 1.34) and 25 matched unexposed children (M age = 5.62, SD = 0.87), were coded using the Children's Play Therapy Instrument–Adaptation for Terror Research (CPTI-ATR; S.E. Chazan & E. Cohen, 2003). Analyses using these ratings showed (a) significant differences between the two groups, (b) significant associations with the caregiver's reports on child's exposure, and (c) significant associations with the caregiver's reports on the child's PTSD symptoms. Play activity ratings of predominant negative affects, frequent acting-out/morbid themes, lowered developmental level, and reduced awareness of the child of him- or herself as a player significantly predicted more PTSD symptoms. PTP which included more coping strategies classified as “overwhelmed reexperiencing” and less “reenactment with soothing” was associated with a higher level of PTSD. Play analysis with the CPTI-ATR may be helpful in identifying PTSD in children and also guide the selection of therapeutic techniques.