Previous studies based on probands from clinical samples suggest that panic disorder aggregates strongly in families and may be due to a highly penetrant single major locus. In this study we examine panic disorder as assessed at blind, structured psychiatric interview in 2163 women from a population-based twin registry. DSM-III-R diagnoses were assigned at a narrow and at a broad level both by clinician review and by computer algorithm. The familial aggregation of panic disorder in this sample was only modest. The relatively small number of affected individuals prevented a definitive resolution of competing genetic and non-genetic models of familial transmission. Although there was some inconsistency across diagnostic approaches, most results suggested that the familial aggregation of panic disorder was due largely to genetic factors. Using a multifactorial-threshold model, the best estimates of the heritability of liability ranged from 30 to 40%. From a familial perspective, panic disorder with phobic avoidance appears to represent a more severe form of the syndrome than panic disorder without avoidance. Our results, which suggest that in the general population panic disorder is only a moderately heritable condition, are at variance with results from several previous investigations based on clinically ascertained samples.