To examine the course and outcome of subjects with generalized anxiety disorder (GAD) and panic disorder, we compared 64 patients with GAD and 68 patients with panic disorder who had participated in drug treatment studies and were interviewed an average of 5 years earlier. At baseline GAD subjects were significantly older, had an earlier onset, and longer duration of illness than panic subjects. GAD subjects also had less severe symptoms. At follow-up, diagnostic stability was observed for both GAD and panic disorder. Significantly fewer GAD subjects achieved full remission at follow-up (18% vs. 45%, p < .01). Subjects with GAD were significantly less anxious at baseline than the panic disorder comparison group, but at follow-up there were few significant differences between groups on most severity of illness variables. This change was due in great part to improvement in the panic disorder group with a concomitant lack of change in the GAD group.