Abstract Urinary free cortisol (UFC) levels were measured at baseline and at four and eight weeks after initiation of treatment in 66 patients who met DSM-III-R criteria for primary panic disorder (PD). Thirty-seven normal control subjects also had UFC levels measured three times at monthly intervals. Patients were randomly assigned to treatment with alprazolam, diazepam, or placebo. At baseline, complicated PD patients (those with agoraphobia and secondary depression) had significantly higher UFC levels than did normal controls. At four and eight weeks, complicated PD patients receiving alprazolam and diazepam had significant reductions in UFC excretion compared to baseline. Patients with uncomplicated PD maintained UFC levels comparable to controls at each sampling period. Treatment with benzodiazepines did not lower UFC levels in this group. These findings suggest that patients with complicated PD demonstrate hyperactivity of the hypothalamo-pituitary-adrenal axis that is decreased by treatment with benzodiazepines.