The purpose of this article is to review the literature concerning the interaction of alcohol and/or substance abuse with panic disorder, the comorbidity of these disorders, possible causal relationships, biologic relationships, and the recognition and treatment of dually disordered patients. A number of studies suggest significant comorbidity between panic disorder and alcoholism or abuse of drugs, especially cocaine and sedatives. Panic may lead to drinking or sedative use and also result from prolonged use or withdrawal of alcohol or other drugs. Possible biologic relationships involve the gamma-aminobutyric acid (GABA)-benzodiazepine receptor complex and the central noradrenergic system. Although treatment of panic in substance abusers has not been studied specifically, guidelines for recognition and management of these patients, including use of antipanic medication, are discussed.