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Alcohol use disorder (AUD) and posttraumatic stress disorder (PTSD) are among the most prevalent disorders in U.S. military veterans and often co-occur. To date, most studies have focused on treatment-seeking samples, although many veterans with AUD/PTSD do not seek treatment. We evaluated the prevalence of psychiatric comorbidities, functioning, and quality of life in a nationally representative sample of U.S. veterans (using data from the National Health and Resilience in Veterans Study) with AUD alone, PTSD alone, and comorbid AUD/PTSD to understand the incremental burden of having both disorders relative to either one. Among those with probable AUD, 20.3% met criteria for probable PTSD. Among those, with probable PTSD, 16.8% met criteria for probable AUD. Compared to veterans with AUD only, veterans with AUD/PTSD were more likely to screen positive for major depression (36.8% vs. 2.3%), generalized anxiety disorder (43.5% vs. 2.9%), suicidal ideation (39.1% vs. 7.0%); to have attempted suicide (46.0% vs. 4.1%); and to be receiving mental health treatment (44.8% vs. 7.5%). They also scored lower on cognitive (d = 0.50), mental (d = 0.51) and physical (d = 0.21) functioning, and quality of life (Cohen d = 0.46). Veterans with comorbid AUD/PTSD were more than three times as likely as veterans with PTSD only to have attempted suicide in their lifetimes (odds ratio = 3.1, 95% confidence interval = 1.8–5.3; 46.0% vs. 22.8%); they did not differ on other measures. Results underscore the burden of co-occurring AUD and PTSD in U.S. veterans, and the importance of engaging these veterans in treatment.