Clinical experience and controlled studies confirm the efficacy of pharmacologic and cognitive-behavioral interventions for the acute treatment of panic disorder and agoraphobia. However, while some patients experience long periods of true remission, panic disorder remains chronic for many, with intermittent periods of acute exacerbation and continued residual distress. Findings from the Massachusetts General Hospital Naturalistic Study of the Longitudinal Course of Panic Disorder suggest that (1) a number of factors contribute to the severity and persistence of panic disorder, including phobic subtype, comorbid anxiety disorders, depression, personality disorders, and anxiety sensitivity; (2) chronicity is common; (3) for some, an anxiety diathesis is manifested early in childhood and sets the tone for later chronicity and comorbidity; (4) maladaptive personality characteristics may be manifestations of an underlying anxiety disorder; (5) patients with continued symptomatology despite improvement may benefit from the flexible integration of pharmacologic and cognitive-behavioral treatment approaches; and (6) long-term treatment is indicated for many patients.