There is a striking similarity between the situations avoided by people with agoraphobia and the environments which provoke disorientation in people with organic balance disorders. This study investigated the possibility that agoraphobia might be linked to balance system dysfunction by comparing the results of balance system tests in 36 people with symptoms of panic and agoraphobia and 20 normal controls. A traditional battery of audiovestibular tests was supplemented with moving platform posturography, which assesses the postural instability induced by disorienting perceptual conditions. Subjects also completed questionnaire measures of somatic symptoms of dizziness and anxiety, agoraphobic cognitions, avoidance behaviour and state anxiety. Over 60% of the Ss with symptoms of panic and agoraphobia were destabilised by the disorienting perceptual conditions, compared with just 10% of the normal controls. Postural instability was strongly related to reported agoraphobic avoidance (r = 0.63, P < 0.01), even after controlling for symptoms, anxiety and agoraphobic cognitions. In our discussion we consider alternative interpretations of these findings, future directions for research, and implications for therapy.