This study investigated the effects of postural threat on the cortical response associated with postural reactions to predictable and unpredictable perturbations to upright stance. Postural threat was manipulated by having individuals stand on an elevated surface to alter the context in which the postural task was performed. Ten healthy young adults experienced a series of predictable and unpredictable trunk perturbations when standing at ground level and at the edge of a platform located 3.2 m above the ground. Participants felt less confident, more fearful of falling, more anxious and less stable when standing at the high surface height. Unpredictable perturbations generated a large negative potential (N1) which was increased by 84% when standing at the high compared to low surface height. The magnitude of change in this potential was related to the magnitude of change in balance perceptions, such as confidence and fear. Predictable perturbations did not generate a N1 potential but instead produced an anticipation-related potential prior to the perturbation. This cortical activity observed in response to predictable perturbations was not influenced by postural threat. A large N1 potential was observed for a 'surprise' perturbation that followed a series of predictable perturbations. There was a trend for the amplitude of this potential to be increased when standing at the high compared to low surface height. The results of this study provide evidence for the modulating influence of psychological factors related to postural threat on the cortical activity associated with postural reactions to unpredictable perturbations.