1. Studies on the pathogenesis of panic disorder (PD) have concentrated on panic attacks. However, PD runs a chronic or episodic course and panic patients remain clinically unwell between attacks. Panic patients chronically hyperventilate, but the implications of this are unclear. 2. Provocation of panic experimentally has indicated that several biological mechanisms may be involved in the onset of panic symptoms. Evidence from provocation studies using lactate, but particularly carbon dioxide (CO2) mixtures, suggests that panic patients may have hypersensitive CO2 chemoreceptors. Klein proposed that PD may be due to a dysfunctional brain's suffocation alarm and that panic patients hyperventilate to keep pCO2 low. 3. Studies of panic patients in the non-panic state have shown EEG abnormalities in this patient group, as well as abnormalities in cerebral blood flow and cerebral glucose metabolism. These abnormalities can be interpreted as signs of cerebral hypoxia that may have resulted from hyperventilation. 4. Cerebral hypoxia is probably involved in the causation of symptoms of anxiety in sufferers of chronic obstructive pulmonary diseases. By chronically hyperventilating, panic patients may likewise be at risk of exposure to prolonged periods of cerebral hypoxia which, in turn, may contribute to the chronicity of their panic and anxiety symptoms. 5. Chronic hyperventilation may engender a self-perpetuating mechanism within the pathophysiology of PD, a hypothesis which warrants further studies of panic patients in the non-panic state.