Contemporary models suggest that persons with panic disorder inaccurately attribute somatic anxiety symptoms to catastrophic causes. This consequently exacerbates their physiological symptoms, triggering full-blown panic attacks. Researchers have modified catastrophic thinking using cognitive therapy, but typically have not employed these techniques during actual episodes of heightened arousal. Thus, reported cognitive changes may not generalize to naturalistic situations involving hyperreactivity. This study describes use of an intervention which simultaneously combines symptom exposure and cognitive therapy techniques. The client treated here experienced reductions in panic attack frequency as well as duration and became less depressed as therapy progressed. Discussion addresses potential causal mechanisms and directions for future research.