Longitudinal studies in naturalistic settings have shed new light on the course and value of therapeutic interventions in panic disorder and agoraphobia. Patients, their families, and clinicians need additional information about the natural course of the disorders and the factors that predispose patients to sustained illness, recovery, and relapse during treatment and upon treatment discontinuation. Clinical experience and controlled studies confirm the efficacy of pharmacologic and cognitive-behavioral therapy (CBT). Newer antidepressants, especially the serotonin selective reuptake inhibitors, represent a significant advance in effective pharmacologic intervention. However, despite the availability of effective treatment options, panic disorder often remains a chronic condition characterized by intermittent remissions and relapses over many years. Depression and comorbid anxiety disorders are associated with increased disease severity, treatment refractoriness, and relapse. The role of CBT as both a primary intervention and as an aid in the discontinuation of pharmacotherapy is reviewed.