Objective: To examine the association between separation anxiety disorder (SAD) and mental disorders in a community sample and to evaluate whether separation anxiety is specifically related to panic disorder with and without agoraphobia. Method: The data come from a 4-year, prospective longitudinal study of a representative cohort of adolescents and young adults aged 14–24 years at baseline in Munich, Germany. The present analyses are based on a subsample of the younger cohort that completed baseline and two follow-up investigations (n = 1,090). DSM-IV diagnoses were made using the Munich Composite International Diagnostic Interview. Cox regressions with time-dependent covariates were used to examine whether prior SAD is associated with an increased risk for subsequent mental disorders. Results: Participants meeting DSM-IV criteria for SAD were at an increased risk of developing subsequent panic disorder with agoraphobia (PDAG) (HR = 18.1, 95% CI = 5.6–58.7), specific phobia (HR = 2.7, 95% CI = 1.001–7.6), generalized anxiety disorder (HR = 9.4, 95% CI = 1.8–48.7), obsessive-compulsive disorder (HR = 10.7, 95% CI = 1.7–66.1), bipolar disorder (HR = 7.7, 95% CI = 2.8–20.8), pain disorder (HR = 3.5, 95% CI = 1.3–9.1), and alcohol dependence (HR = 4.7, 95% CI = 1.7–12.4). Increased hazard rates for PDAG (HR = 4.2, 95% CI = 1.4–12.1), bipolar disorder type II (HR = 8.1, 95% CI = 2.3–27.4), pain disorder (HR = 1.9, 95% CI = 1.01–3.5), and alcohol dependence (HR = 2.1, 95% CI = 1.1–4.) were also found for subjects fulfilling subthreshold SAD. Conclusions: Although revealing a strong association between SAD and PDAG, our results argue against a specific SAD-PDAG relationship. PDAG was neither a specific outcome nor a complete mediator variable of SAD.