Objective: The US military veteran population is changing rapidly, and contemporary data on the prevalence of DSM-5 posttraumatic stress disorder (PTSD) are lacking. The DSM-5 clarified PTSD Criterion A to delineate direct and indirect trauma exposures, but effects on the conditional probability of PTSD and functional impairment remain unknown. The objectives of this study were to provide contemporary estimates of PTSD prevalence and conditional probabilities in the US military veteran population, determine the likelihood of developing PTSD following direct versus indirect exposures to potentially traumatic events (PTEs), and examine the effects of direct and indirect PTEs and PTSD on functional impairment. Methods: Data were analyzed from the 2019–2020 National Health and Resilience in Veterans Study (NHRVS), an online survey of a nationally representative sample of US military veterans conducted from November 2019 to March 2020 (median completion date: November 21, 2019). Trauma exposures were assessed with the Life Events Checklist-5 and PTSD with the PTSD Checklist for DSM-5. Results: The weighted prevalence of lifetime PTSD was 9.4% (95% CI, 8.5%–10.3%) and of past-month PTSD was 5.0% (95% CI, 4.3%–5.7%). Direct PTEs were associated with increased odds of lifetime (odds ratio [OR] = 1.36; 95% CI, 1.30–1.42) and past-month PTSD (OR = 1.38; 95% CI, 1.31–1.46), but indirect PTEs were not (lifetime OR = 1.01; 95% CI, 1.00–1.03; past-month OR = 0.99; 95% CI, 0.97–1.00). Both PTSD (unstandardized B = 6.11, SE = 0.35) and direct PTEs (unstandardized B = 0.13, SE = 0.04), but not indirect PTEs, were significantly associated with functional impairment after adjustment for demographic and psychiatric variables. Conclusions: The prevalence of lifetime PTSD in US military veterans (9.4%) is slightly higher than 2016 estimates (6.9%–8.1%). Direct and indirect PTEs are prevalent in US military veterans, with only direct PTEs associated with higher conditional probability of past-month PTSD and greater functional impairment.