This study investigated the impact of war trauma on behavioral and emotional disorders, and neuroticism in children by prospectively examining the potential mediator and/or moderator effects of parental psychological distress. The sample consisted of 205 parents and their children. The results indicated that parent’s psychological distress did mediate and moderate the effect of trauma exposure on emotional and behavioral disorders in children. An integrated intervention which simultaneously targets children and parental distress symptoms is needed. The integrated intervention may intend to use trauma-focused cognitive behavioral therapy model that integrates cognitive, behavioral, interpersonal, and family therapy principles with trauma interventions.