In the wake of the wars in Iraq and Afghanistan, courts and social service systems across the country have begun establishing veterans treatment courts (VTC). The first VTC was created in 2004 and there are now over 300 in at least 35 states. Yet, their underlying assumptions have not been clearly articulated and their functioning and outcomes have not been well tested. These courts aim to reduce rates of incarceration and recidivism among justice-involved veterans and draw heavily on the structure and assumptions of drug and mental health courts. However, VTCs are different in important ways. Unlike other problem solving courts, VTCs actively express gratitude to criminal defendants (for past military service) and have the ability to connect participants to a socially-esteemed identity. Earlier problem solving courts have drawn on Tyler’s theory of procedural justice to predict a path from procedurally fair treatment and social bonds with court personnel through changes in social identity to increased perceptions of legal legitimacy and, ultimately, program completion and reduced recidivism. The present study tested a modified, version of Tyler’s theory that incorporates gratitude and focuses on veteran identity as the mediating construct between fair treatment and perceptions of legal legitimacy. A cross-sectional survey design was used with a convenience sample (N = 188) of participants in two Arizona VTCs. The results indicate that perceptions of procedural justice, perceived social bonds and receipt of gratitude are positively associated with both veteran identity and perceptions of legal legitimacy. Further, veteran identity was found to be a significant mediator between the first three constructs and legal legitimacy. Finally, neither recidivism risk nor race/ethnicity moderated the relationships. The study supports the importance of acknowledging past military service and enhancing the level of veteran identity among VTC participants. Implications for practice and future research are discussed.