The presence of asthma is a risk factor for the development of panic disorder. The co-occurrence of panic disorder and asthma is greater than would be expected based on their individual prevalence rates. This may be due in part to the important role of respiratory factors in panic disorder. Panic and anxiety can directly exacerbate asthma symptoms through hyperventilation, and are associated with patients' overuse of as-needed asthma medications, with more frequent hospital admission and longer hospital stays, and with more frequent steroid treatment, all of which are independent of degree of objective pulmonary impairment. The study of panic disorder among asthmatics can contribute to improved medical outcome for this subgroup, while also improving our understanding of the biological and psychological etiology of panic. This article will review the literature on this relationship by examining how panic disorder and panic symptoms affect the course of asthma, how asthma affects the symptoms and physiology of panic disorder, and the consequent research implications of this relationship.