Uncontrolled haemorrhage is a major preventable cause of death in patients with traumatic injury. Trauma-induced coagulopathy (TIC) describes abnormal coagulation processes that are attributable to trauma. In the early hours of TIC development, hypocoagulability is typically present, resulting in bleeding, whereas later TIC is characterized by a hypercoagulable state associated with venous thromboembolism and multiple organ failure. Several pathophysiological mechanisms underlie TIC; tissue injury and shock synergistically provoke endothelial, immune system, platelet and clotting activation, which are accentuated by the ‘lethal triad’ (coagulopathy, hypothermia and acidosis). Traumatic brain injury also has a distinct role in TIC. Haemostatic abnormalities include fibrinogen depletion, inadequate thrombin generation, impaired platelet function and dysregulated fibrinolysis. Laboratory diagnosis is based on coagulation abnormalities detected by conventional or viscoelastic haemostatic assays; however, it does not always match the clinical condition. Management priorities are stopping blood loss and reversing shock by restoring circulating blood volume, to prevent or reduce the risk of worsening TIC. Various blood products can be used in resuscitation; however, there is no international agreement on the optimal composition of transfusion components. Tranexamic acid is used in pre-hospital settings selectively in the USA and more widely in Europe and other locations. Survivors of TIC experience high rates of morbidity, which affects short-term and long-term quality of life and functional outcome.