There is intriguing evidence suggesting pathophysiologic relationships among dyspnea, hyperventilation, and panic anxiety. The symptoms of panic attacks and pulmonary disease overlap, so that panic anxiety can reflect underlying cardiopulmonary disease and dyspnea can reflect an underlying anxiety disorder. The pathogenesis of panic may be related to respiratory physiology by several mechanisms: the anxiogenic effects of hyperventilation, the catastrophic misinterpretation of respiratory symptoms, and/or a neurobiologic sensitivity to CO2, lactate, or other signals of suffocation. In a subset of patients with PD, incipient pulmonary dysfunction may also contribute to their anxiety symptoms. Patients with pulmonary disease, particularly those with obstructive lung disease, have a high rate of panic symptoms and PD. There is reason to believe that pulmonary disease constitutes a risk factor for the development of panic related to repeated experiences with dyspnea and life-threatening exacerbations of pulmonary dysfunction, repeated episodes of hypercapnia or hyperventilation, the use of anxiogenic medications, and the stress of coping with chronic disease. Panic in pulmonary patients may carry significant morbidity, including phobic avoidance of activity, overly aggressive treatment with anxiogenic medications, and more prolonged and frequent hospitalization. Successful treatment of panic in these patients can improve functional status and quality of life by relieving anxiety and dyspnea. Nonpharmacologic treatment of panic, including cognitive-behavioral approaches, can be useful in patients with concomitant respiratory disease. Sedating medications such as benzodiazepines should be used with caution in patients with pulmonary disease to avoid respiratory depression. Serotonergic antidepressants (SSRIs) and anxiolytics (buspirone) may be effective treatments for panic or generalized anxiety in pulmonary patients and have relatively little potential for significant adverse effects.