Evidence from animal models of anxiety has led to the hypothesis that serotonin enhances inhibitory avoidance (related to anxiety) in the forebrain, but inhibits one-way escape (panic) in the midbrain periaqueductal gray (PAG). Stressing the difference between these emotions, neuroendocrinological results indicate that the hypothalamic-pituitary-adrenal axis is activated by anticipatory anxiety, but not by panic attack nor by electrical stimulation of the rat PAG. Functional neuroimaging has shown activation of the insula and upper brain stem (including PAG), as well as deactivation of the anterior cingulated cortex (ACC) during experimental panic attacks. Voxel-based morphometric analysis of brain magnetic resonance images has shown a grey matter volume increase in the insula and upper brain stem, and a decrease in the ACC of panic patients at rest, as compared to healthy controls. The insula and the ACC detect interoceptive stimuli, which are overestimated by panic patients. It is suggested that these brain areas and the PAG are involved in the pathophysiology of panic disorder.