Cognitive-behavioral therapy and medication are efficacious treatments for panic disorder, but individual attributes such as coping and motivation are important determinants of treatment response. A sample of 56 patients with panic disorder, treated with group cognitive-behavioral therapy, were reassessed 6 months and 12 months after initial assessment. We studied the effect of self-rated importance of religion, perceived stress, self-esteem, mastery, and interpersonal alienation on outcome as measured by the General Severity Index of the Brief Symptom Inventory (BSI.GSI). Importance of religion was a predictor of BSI.GSI symptom improvement at 1 year. Over time, improvement was seen for the religion is very important subgroup in the BSI.GSI and Perceived Stress Scales. This study suggests that one mechanism by which high importance of religion reduces psychiatric symptoms is through reducing perceived stress. Depression and Anxiety 23:266–273, 2006. © 2006 Wiley-Liss, Inc.