Impairments in Caregiving (ICG) secondary to mental illness and substance use have been linked to adverse outcomes in children. Little is known, however, about whether outcomes vary by type of ICG, exposure to co-occurring traumas, or mechanisms of maladaptive outcomes. Clinic-referred youth age 7-18 years (n = 3988) were compared on ICG history, demographics, trauma history, and mental health symptoms. Child trauma exposure was tested as a mediator of ICG and child symptoms. Youth with ICG were at heightened risk for trauma exposure, PTSD, internalizing symptoms, total behavioral problems, and attachment problems, particularly youth with multiple types of ICG. Effect sizes were moderate to large for PTSD, internalizing symptoms, and total behavioral problems. Number of trauma types mediated the relationship between ICG and child symptoms. ICG was related to trauma exposure within and outside the family context. Understanding these links has important implications for interrupting intergenerational trauma and psychopathology.