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In the DSM-IV, a panic disorder (PD) diagnosis includes specification of agoraphobia, which is primarily an index of situational avoidance due to fear of panic. No other anxiety diagnosis requires specification of level of avoidance. This raises the question as to whether agoraphobia provides unique information beyond the core features of PD (i.e., panic attacks and panic-related worry). The incremental validity of agoraphobia, defined using DSM-IV specifiers versus level of situational avoidance, was examined in relation to the expression and treatment of PD (N = 146). Analyses indicate that agoraphobia status adds uniquely to the prediction of PD symptoms, impairment, and response to treatment. However, level of situational avoidance, defined either as a continuous or dichotomous variable, appears to have greater utility compared to the DSM-IV method of classifying agoraphobia. In summary, the agoraphobia specifier seems to have clinical utility but this could be improved by focusing on a dimensional assessment of situational avoidance.