Over the past decade, panic disorder has become a major research focus in psychopathology and treatment. Initial interest in the causes of the disorder was triggered by biological theories and investigators. More recently, however, research on newly developed psychological approaches has advanced our understanding of panic disorder and has led to the development of specific treatment programs. This review describes symptomatology and course, the psychophysiological model of panic and a psychological treatment that directly targets panic attacks and the fears and behaviors associated with them.