Anxiety disorders, particularly panic disorder (PD), are associated with respiratory abnormalities. PD consists of unexpected panic attacks (PA) with anxiety, fear and many autonomic and respiratory symptoms. There is a substantial body of literature demonstrating that stimulation of respiration is a common event in panic disorder patients during PA. A number of abnormalities in respiration, such as enhanced CO(2) sensitivity, have been detected in PD patients. As a result, some investigators advanced that there is a fundamental abnormality in the physiological mechanisms that control breathing in PD. Studies indicate that PD patients with dominant respiratory symptoms are particularly sensitive to respiratory tests compared with those who do not manifest dominant respiratory symptoms, possibly representing a distinct subtype. Accumulated evidence suggests that respiratory physiology remains normal in PD patients and that their tendency to hyperventilate and to react with panic to respiratory stimulants like CO(2) represents the triggering of a hypersensitive fear network. However, some recent evidences support the presence of subclinical abnormalities in respiration and other functions related to body homeostasis. The fear network, composed by the hippocampus, the medial prefrontal cortex, the amygdala and its brainstem projections, may be abnormally sensitive in PD patients. This theory might explain why both medication and psychosocial therapies are clearly effective. The evidence of abnormalities in several neurochemical systems might be just the expression of the complex interactions among brain circuits. Our aim was to review the relationship between respiration and panic disorder, addressing the respiratory subtype of panic disorder, the hyperventilation syndrome, the respiratory challenge tests, the current mechanistic concepts and the pharmacological implications.