It has been shown that, under certain circumstances, anxiety is associated with a processing bias favouring threatening information. To explain why this bias is apparent only on certain cognitive tasks, it has recently been proposed that the bias operates only when there is competition for processing resources. The present study sought to replicate previous evidence for the 'competition' hypothesis, while taking into account a potential confounding factor of word categorization in the stimulus materials. Anxious patients and normal controls were compared on their lexical decision times for threatening, categorized neutral and uncategorized neutral words that were presented either alone or accompanied by irrelevant nonword stimuli (i.e. absence vs presence of competition). The results were only partially consistent with previous findings and highlighted the importance of considering separately the effects of word valence and word categorization. When the latter was taken into account, the results indicated that an anxiety-related bias was only evident when there was competition for processing resources and when the information was presented outside the focus of Ss' attention. A modified version of the competition hypothesis was proposed in the light of these results and previous research into attentional biases in anxiety.