Outpatient agoraphobics with panic were studied to determine the nature and extent of their alcohol use/abuse and its relationship to phobic symptoms. From 10 to 20% were alcoholic by DSM-III diagnoses, self-labeling and screening with the Michigan Alcohol Screening Test. Comparisons on self-report measures of demographically similar groups of alcoholic agoraphobics (n = 22) and non-alocholic agoraphobics (n = 21) revealed differences on a variety of etiological and current clinical dimensions. The identified alcoholics were more depressed, more socially phobic, more fearful of somatic symptoms when nervous or afraid and more likely to engage in catastrophic thinking. They also rated recent panic attacks as more intense, and reported smaller reductions in phobic avoidance when accompanied by a trusted companion. Use of alcohol to self-medicate for dysphoria was reported by 91% of the alcoholics and 43% of the nonalcoholics. Substantial proportions of the alcoholics used alcohol to reduce anxiety, to control disturbing cognitions, to accomplish necessary activities, including work or school requirements, to venture into public, and to cope with the anticipation of panic attacks. Implications for research and treatment are discussed.