Inhibition of fear generalization with new learning is an important process in treatments for anxiety disorders. Generalization of maladaptive cognitions related to traumatic experiences (overgeneralized beliefs) have been demonstrated to be associated with posttraumatic stress disorder (PTSD) in adult populations, whereas more balanced, accommodated beliefs are associated with symptom improvement. It is not yet clear whether (a) overgeneralization and accommodation are associated with PTSD treatment outcome in youth, or (b whether accommodated beliefs can interact with or inhibit cognitive overgeneralization, as has been demonstrated in research on behavior-based fear generalization. The current study examined the relationships between overgeneralized and accommodated beliefs, child age, and symptom reduction in a sample of 81 youth (age 7–17 years), who received Trauma-Focused Cognitive Behavioral Therapy. Overgeneralized and accommodated beliefs expressed during the exposure phase of treatment were coded in audio-recorded therapy sessions. Overgeneralization predicted (a) higher internalizing symptom scores at posttreatment, particularly for younger children, and less improvement over treatment, and (b) higher externalizing scores at 1-year follow-up and steeper symptom increases over this period. In contrast, accommodation was associated with (a) lower posttreatment internalizing symptoms and greater improvement over treatment, and (b) lower externalizing scores at 1-year follow-up, particularly for younger children. High levels of accommodation moderated the relationship between overgeneralization and worse symptom outcomes, except when predicting the slope of internalizing scores over treatment, and age did not moderate these effects. There were no significant predictors of child-reported PTSD-specific symptoms, although PTSD symptoms did decrease significantly over the course of treatment and maintain 1 year after treatment.