It has been estimated that approximately 30,000 patients a year suffer awareness or consciousness during anesthesia. This paper reviews existing knowledge of the psychological impact and psychiatric sequelae of awareness during anesthesia. Literature on awareness and memory during anesthesia, traumatic memory, and posttraumatic stress disorder (PTSD) was reviewed using computer searches, books, and referenced articles. Few case reports of awareness have identified the accompanying psychological trauma and resulting PTSD. Five published cases illustrating relevant material were selected for inclusion. Waking up during anesthesia, especially if the patient experienced pain, is a traumatic event which places the patient at risk for developing PTSD. Awareness-induced PTSD must be considered for patients who present for mental health treatment following surgery. The advantages of light anesthesia must be balanced against the risk of awareness-induced PTSD.