Comorbidity between bipolar disorder and anxiety disorders has attracted considerable attention in recent years. However, a majority of the earlier studies examined anxiety disorders in acutely ill patients resulting in a possible confounding effect of the affective episodes. This study examines the prevalence of anxiety disorders in remitted bipolar subjects recruited from a psychiatric hospital in India and their effect on the severity of bipolar illness. A total of eighty remitted DSM-IV adult bipolar subjects and 50 non-psychiatric controls were recruited over a 10-month period. They were evaluated using a structured interview and various scales. The effect of anxiety disorders on bipolar severity was analyzed using multiple regression analyses. Anxiety disorders were highly prevalent in bipolar subjects compared to controls (49 [61%] vs. 7 [14%], chi(2) = 28.01, P < 0.001). Commonest lifetime anxiety disorder was obsessive-compulsive disorder (35%). Lifetime anxiety disorder had significant effect on all four indices of severity of illness, that included (1) percentage of time spent in episodes (Beta = 18.67, SE = 5.11, P < 0.001), (2) maximum period of continuous euthymia in the preceding 2 years (Beta = -5.26, SE = 1.71, P = 0.003), (3) presence of psychosis (Beta = 3.22, SE = 1.02, P = 0.002), and 4) response to mood stabilizers (Beta = -2.11, SE = 0.76, P = 0.006). The findings of this study confirm previous observations of the high prevalence and negative impact of comorbid anxiety disorders in bipolar disorder and also demonstrate that the findings are similar in culturally diverse settings. Future studies should systematically examine the various treatment options for anxiety disorders in bipolar patients. It is also necessary to examine the neurobiological and family/genetic correlates of anxious bipolar subjects to validate if they are a subgroup of bipolar disorders.