Phobic postural vertigo (PPV) is characterized by a subjective dizziness and postural imbalance. Changes in postural control strategy may cause the disturbed postural performance in PPV. A better understanding of the mechanisms behind this change in strategy is required to improve the diagnostic tools and therapeutic options for this prevalent disorder. Here we apply stabilogram diffusion analysis (SDA) to examine the characteristics and modes of interaction of open- and closed-loop processes that make up the postural control scheme in PPV. Twenty patients with PPV and 20 age-matched healthy controls were recorded on a stabilometer platform with eyes open and with eyes closed. Spatio-temporal changes of the center of pressure (CoP) displacement were analyzed by means of SDA and complementary CoP amplitude measures. (1) Open-loop control mechanisms in PPV were disturbed because of a higher diffusion activity (p < 0.001). (2) The interaction of open- and closed-loop processes was altered in that the sensory feedback threshold of the system was lowered (p = 0.010). These two changes were comparable to those observed in healthy subjects during more demanding balance conditions such as standing with eyes closed. These data indicate that subjective imbalance in PPV is associated with characteristic changes in the coordination of open- and closed-loop mechanisms of postural control. Patients with PPV use sensory feedback inadequately during undisturbed stance, and this impairs postural performance. These changes are compatible with higher levels of anti-gravity muscle activity and co-contraction during the conscious concentration on control of postural stability.