Research indicates that disruptions in family functioning following trauma predict the development of symptoms better than event-related variables. However, research has been limited in the area of the impact of trauma exposure on family functioning. This paper examines the clinical and research literatures to clarify the connection between chronic trauma exposure and family processes with a focus on the social ecology of the low-income, urban neighborhoods. The review explores the strength of existing empirical knowledge regarding the impact of trauma at multiple levels within the family including data supporting a direct, casual link. In conducting the review, a search of databases including PsychINFO, Academic Search Premier, Journals, and PILOTS was run using the keywords: psychic trauma, chronic trauma, posttraumatic stress disorder (PTSD) and family functioning, family processes, parenting, couples, siblings, and coping. Findings show that families living in urban poverty face harsh conditions and multiple traumas. Repeated exposure to trauma creates a complex set of emotional, cognitive, behavioral, physiological, and spiritual reactions that occur before, during, and after traumatic events. Family functioning seems to be a powerful intermediary of these effects; however, there has been insufficient consideration of changes that occur in the family as a result of living in this sociocultural context. This examination provides a theoretical model for further study and outlines current limitations in research design and methods with suggestions for improvement. Tables, References