OBJECTIVE: The study evaluated data from a sample of persons with severe psychotic disorders to determine whether those with and without comorbid panic attacks differed in rates of comorbidity of other psychiatric disorders, in quality of life, and in rehabilitation outcomes. METHODS: A total of 120 individuals with psychotic disorders were assessed with the Center for Epidemiologic Studies-Depression scale, the Structured Clinical Interview for DSM-III-R, the General Health Questionnaire, the Global Assessment of Functioning scale, and several quality-of-life measures at baseline and four and a half months after they had participated in a social rehabilitation program. Multivariate analyses of variance and Pearson's chi square tests were used to compare baseline and follow-up scores between individuals who did and did not have panic attacks. RESULTS: Eighteen (15 percent) of the participants who had severe psychotic disorders also had panic attacks. Participants with this type of comorbidity had significantly higher rates of major depressive disorder, specific phobia, sedative abuse, polysubstance abuse, other substance abuse, and anorexia nervosa than participants who did not have panic attacks. Participants who had panic attacks also had poorer rehabilitative outcomes and poorer quality of life at baseline and at follow-up than participants who did not have panic attacks. CONCLUSIONS: These data are the first to show that comorbid panic attacks are associated with poorer rehabilitative outcomes and poorer quality of life among individuals with severe psychotic disorders than among those who have psychotic disorders without panic attacks. Panic attacks may be a valuable prognostic indicator among persons with psychotic disorders and may have implications for treatment and rehabilitation.