Although the effectiveness of exposure therapy for PTSD is recognized, treatment mechanisms are not well understood. Emotional processing theory (EPT) posits that fear reduction within and between sessions creates new learning, but evidence is limited by self-report assessments and inclusion of treatment components other than exposure. We examined trajectories of physiological arousal and their relation to PTSD treatment outcome in a randomized controlled trial of written exposure treatment, a protocol focused on exposure to trauma memories. Hierarchical linear modeling was used to model reduction in Clinician Administered PTSD Scale score as a predictor of initial activation and within- and between-session change in physiological arousal. Treatment gains were significantly associated with initial physiological activation, but not with within- or between-session changes in physiological arousal. Treatment gains were associated with larger between-session reductions in self-reported arousal. These findings highlight the importance of multimethod arousal assessment and add to a growing literature suggesting refinements of EPT.