Several theories of the development of panic disorder (PD) with or without agoraphobia have emerged in the last 2 decades. Early theories that proposed a role for classical conditioning were criticized on several grounds. However, each criticism can be met and rejected when one considers current perspectives on conditioning and associative learning. The authors propose that PD develops because exposure to panic attacks causes the conditioning of anxiety (and sometimes panic) to exteroceptive and interoceptive cues. This process is reflected in a variety of cognitive and behavioral phenomena but fundamentally involves emotional learning that is best accounted for by conditioning principles. Anxiety, an anticipatory emotional state that functions to prepare the individual for the next panic, is different from panic, an emotional state designed to deal with a traumatic event that is already in progress. However, the presence of conditioned anxiety potentiates the next panic, which begins the individual's spiral into PD. Several biological and psychological factors create vulnerabilities by influencing the individual's susceptibility to conditioning. The relationship between the present view and other views, particularly those that emphasize the role of catastrophic misinterpretation of somatic sensations, is discussed.