This chapter details the treatment of panic disorder and agoraphobia in psychosis, highlighting how mastery over panic sensations can reduce overall fear and support psychosis management. After stating the treatment goals, it introduces the Panic Disorder Severity Scale for assessment. The intervention includes psychoeducation about panic, breathing retraining, progressive muscular relaxation, cognitive restructuring of catastrophic misinterpretations, interoceptive exposure to feared bodily sensations, and in vivo exposure to avoided situations. A case vignette illustrates how this structured program is delivered to a patient with schizophrenia and how gains in panic control can indirectly weaken paranoid beliefs and functional avoidance.