In this paper, we draw on empirical research and theoretical models of refugee and posttrauma mental health to propose the “Psychological Interaction with Environment (PIE) Matrix Model” of refugee mental health. This model focuses on the mental health of adult refugees and proposes that psychological factors and the external environment interact to influence mental health outcomes and functioning for individuals with refugee backgrounds. Environmental factors include adversity faced before, during, and after the migration journey, including adversity faced in a resettlement or postdisplacement environment. Psychological factors refer to psychological (i.e., cognitive and emotional) mechanisms that individuals may use to cope with adversity. We posit that individuals from refugee backgrounds are likely to show individual differences in psychological processes that may protect against or underpin the development and maintenance of psychopathology following exposure to trauma and displacement. The PIE Matrix Model proposes a framework to guide intervention by identifying key pathways by which psychological and environmental factors impact one another. We suggest that psychological interventions can be targeted according to the kind and level of support different individuals may require, based on individualized and context-driven assessments of the interaction between environmental and psychological factors at any given point in time. This model draws on existing models of refugee adaptation and highlights the need for longitudinal and experimental research to explain the interaction between these factors and their causal impact on refugee mental health.