A vehicular trailer guidance system includes an electronic control unit (ECU), a rear backup camera and a trailer camera disposed at a rear portion of a trailer hitched to the vehicle. A display screen is disposed in the vehicle and viewable by a driver of the vehicle. With the trailer hitched to the vehicle, the display screen is operable to display video images derived from image data captured by the trailer camera. At least in part via processing at the ECU of image data captured by the trailer camera, an instruction that aids maneuvering the vehicle in reverse with the trailer hitched thereto during a reversing maneuver of the vehicle and trailer is generated. During the reversing maneuver of the vehicle and trailer, the display screen displays an alert when angling of the trailer relative to the vehicle approaches a jackknife condition.