This study compared the effectiveness of two psychotherapy approaches for treating combat veterans with chronic post‐traumatic stress disorder (PTSD): cognitive–behavioural therapy (CBT) and psychodynamic psychotherapy (PDT). These treatments are routinely used by the Unit for Treatment of Combat‐Related PTSD of the Israel Defense Forces (IDF). IDF veterans with chronic PTSD were assigned to either CBT (n = 148) or PDT (n = 95) based on the nature of their complaint and symptoms. Psychiatric status was assessed at baseline, post‐treatment and 8–12 months follow‐up using the Clinician‐Administered PTSD Scale, the PTSD Questionnaire, the Montgomery and Asberg Depression Rating Scale and the Psychotherapy Outcome Assessment and Monitoring System‐Trauma Version assessment questionnaire. Both treatment types resulted in significant reduction in symptoms and with improved functioning from pre‐treatment to post‐treatment, which were maintained at follow‐up. No differences between the two treatments were found in any the effectiveness measures. At post‐treatment, 35% of the CBT patients and 45% of the PDT patients remitted, with no difference between the groups. At follow‐up, remission rates were 33% and 36% for the CBT and PDT groups, respectively. The study recommends further randomized controlled trials to determine treatment efficacy. Copyright © 2015 John Wiley & Sons, Ltd. Key Practitioner Message Both cognitive‐behavioural therapy and psychodynamic psychotherapy have to be treatments offered in clinics for treating PTSD. Therapists who treat PTSD should be familiar with cognitive‐behavioural and dynamic methods. The type of treatment chosen should be based on thorough psychosocial assessment.