Abstract: Background: This study describes the trauma experiences of people with severe mental illness (SMI) in Ethiopia and presents a model of how SMI and trauma exposure interact to reduce functioning and quality of life in this setting. Methods: A total of 53 participants living and working in a rural district in southern Ethiopia were interviewed: 18 people living with SMI, 21 caregivers, and 14 primary health care providers. Results: Many participants reported that exposure to traumatic and stressful events led to SMI, exacerbated SMI symptoms, and increased caregiver stress and distress. In addition, SMI symptoms and caregiver desperation, stress or stigma were also reported to increase the possibility of trauma exposure. Conclusions: Results suggest it is incumbent upon health professionals and the broader health community to view trauma exposure (broadly defined) as a public health problem that affects all, particularly individuals with SMI.