OBJECTIVE This study was designed to determine the minimum paroxetine dose effective for treating panic disorder. METHODS Of 425 patients with DSM-III-R panic disorder with or without agoraphobia who underwent a 2-week drug-free screening period, 278 patients were randomly assigned to double-blind treatment with a 10-week course of placebo or paroxetine at a dose of 10, 20, or 40 mg/day. RESULTS At 40 mg/day, paroxetine was superior to placebo across the majority of outcome measures. Despite a mean of 9.5 to 11.6 full panic attacks during the screening period, 86.0% of the patients taking 40 mg of paroxetine, 65.2% of those taking 20 mg, 67.4% of those taking 10 mg, and 50.0% of the placebo-treated patients were free of full panic attacks during the 2 weeks ending at week 10. The 40-mg paroxetine group experienced significantly greater global improvement than the placebo group and significantly greater improvement in frequency of full and limited-symptom panic attacks, intensity of full panic attacks, phobic fear, anxiety, and depressive symptoms, usually evident by week 4. All doses of paroxetine were well tolerated, and adverse effects were consistent with those associated with selective serotonin reuptake inhibitors. CONCLUSIONS Paroxetine is an effective and well-tolerated short-term treatment of panic disorder. The minimum dose demonstrated to be significantly superior to placebo was 40 mg/day, although some patients did respond at lower doses.