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Objective Posttraumatic stress disorder (PTSD) is a debilitating condition that when left untreated can have severe lifelong consequences for psychological, social, and occupational functioning. Initial conceptualizations of PTSD were centered on adult presentations. However, the instantiation of developmentally appropriate PTSD in young children (PTSD-YC) criteria, tailored to preschool (6 years old and younger) children, represents an important step toward identifying more young children experiencing distress. This study explored population-level prevalence of PTSD-YC indexed via an alternative algorithm for DSM-IV PTSD (AA-PTSD). Method Representative population data were used to test whether application of AA-PTSD criteria, relative to the DSM-IV PTSD algorithm, increased identification of 5- to 6-year-old children with clinical needs in both the general population (n = 3,202) and among looked after children (ie, in Britain, foster children are called looked after children [more commonly referred to as children in care].) (n = 137), in whom the risk of mental health issues is greater. Results Notably, no 5- to 6-year-old children in the general population sample were diagnosed with PTSD using adult-based DSM-IV criteria. In contrast, AA-PTSD prevalence was 0.4% overall, rising to 5.4% in trauma-exposed children. In looked after children, overall PTSD prevalence rose from 1.2% when applying adult-based DSM-IV criteria to 14% when using AA-PTSD criteria. Of trauma-exposed looked after children, 2.7% met criteria for DSM-IV PTSD compared with 57.0% when applying AA-PTSD criteria. In both samples, use of the alternative algorithm to index PTSD-YC criteria markedly increased identification of children experiencing functional impairment owing to symptoms. Conclusion Results demonstrate the utility of the PTSD-YC diagnosis beyond at-risk and treatment-seeking samples. Use of PTSD-YC criteria substantially improves identification of 5- to 6-year-old children burdened by PTSD at the population level.