Abstract Background The North-Eastern part of Sri Lanka had already been affected by civil war when the 2004 Tsunami wave hit the region, leading to high rates of posttraumatic stress disorder (PTSD) in children. In the acute aftermath of the Tsunami we tested the efficacy of two pragmatic short-term interventions when applied by trained local counselors. Methods A randomized treatment comparison was implemented in a refugee camp in a severely affected community. 31 children who presented with a preliminary diagnosis of PTSD were randomly assigned either to six sessions Narrative Exposure Therapy for children (KIDNET) or six sessions of meditation-relaxation (MED-RELAX). Outcome measures included severity of PTSD symptoms, level of functioning and physical health. Results In both treatment conditions, PTSD symptoms and impairment in functioning were significantly reduced at one month post-test and remained stable over time. At 6 months follow-up, recovery rates were 81% for the children in the KIDNET group and 71% for those in the MED-RELAX group. There was no significant difference between the two therapy groups in any outcome measure. Conclusion As recovery rates in the treatment groups exceeded the expected rates of natural recovery, the study provides preliminary evidence for the effectiveness of NET as well as meditation-relaxation techniques when carried out by trained local counselors for the treatment of PTSD in children in the direct aftermath of mass disasters.