OBJECTIVE: The goals of this study were to assess the antipanic efficacy of a new, sustained-release formulation of alprazolam and to assess the safety and tolerability of once-a-day administration of 1-10 mg of sustained-release alprazolam. METHOD: One hundred ninety-four patients with diagnosis of agoraphobia with panic attacks or panic disorder with limited phobic avoidance underwent a 1-week placebo washout before being randomly assigned to groups receiving 8 weeks of double-blind treatment with either sustained-release alprazolam or placebo. RESULTS: There was a significant treatment effect favoring sustained-release alprazolam (highest mean dose = 4.7 mg/day) across almost all measures of anxiety, panic, and phobic avoidance, despite a significantly higher dropout rate in patients receiving placebo. Eighty- five percent of the patients treated with sustained-release alprazolam, compared with 61% of the patients given placebo, reported complete blockade of panic attacks by the end of 6 weeks of treatment. Sedation was the most commonly reported adverse effect. Discontinuation of sustained-release alprazolam was associated with moderate but transient levels of distress in 48% of the patients; discontinuation of placebo led to distress in only 10% of the patients. Nonetheless, there was no difference in the proportion of patients who were able to remain off the study drug for at least 2 weeks. CONCLUSIONS: These results suggest that sustained-release alprazolam is highly effective in the acute treatment of panic disorder at doses comparable to those in the originally marketed compressed tablet of alprazolam. The medication was well tolerated but showed rebound effects during a rapid drug taper after 6 weeks of treatment.