The 11th version of the International Classification of Diseases (ICD-11) includes complex posttraumatic stress disorder (CPTSD) as a separate diagnostic entity alongside posttraumatic stress disorder (PTSD). ICD-11 CPTSD is defined by six sets of symptoms, three that are shared with PTSD (reexperiencing in the here and now, avoidance, and sense of current threat) and three (affective dysregulation, negative self-concept, and disturbances in relationships) representing pervasive “disturbances in self-organization” (DSO). There is considerable evidence supporting the construct validity of ICD-11 CPTSD, but no theoretical account of its development has thus far been presented. A theory is needed to explain several phenomena that are especially relevant to ICD-11 CPTSD such as the role played by prolonged and repeated trauma exposure, the functional independence between PTSD and DSO symptoms, and diagnostic heterogeneity following trauma exposure. The memory and identity theory of ICD-11 CPTSD states that single and multiple trauma exposure occur in a context of individual vulnerability which interact to give rise to intrusive, sensation-based traumatic memories and negative identities which, together, produce the PTSD and DSO symptoms that define ICD-11 CPTSD. The model emphasizes that the two major and related causal processes of intrusive memories and negative identities exist on a continuum from pre-reflective experience to full self-awareness. Theoretically derived implications for the assessment and treatment of ICD-11 CPTSD are discussed, as well as areas for future research and model testing.