CONTEXT Panic disorder and generalized anxiety disorder are prevalent in primary care, associated with poor functional outcomes, and are often unrecognized and ineffectively treated by primary care physicians. OBJECTIVE To examine whether telephone-based collaborative care for panic and generalized anxiety disorders improves clinical and functional outcomes more than the usual care provided by primary care physicians. DESIGN Randomized controlled trial. SETTING Four Pittsburgh area primary care practices linked by a common electronic medical record system. Patients A total of 191 adults aged 18 to 64 years with panic and/or generalized anxiety disorder who were recruited from July 2000 to April 2002. Intervention Patients were randomly assigned to a telephone-based care management intervention (n = 116) or to notification alone of the anxiety disorder to patients and their physicians (usual care, n = 75). The intervention involved non-mental health professionals who provided patients with psychoeducation, assessed preferences for guideline-based care, monitored treatment responses, and informed physicians of their patients' care preferences and progress via an electronic medical record system under the direction of study investigators. MAIN OUTCOME MEASURES Independent blinded assessments of anxiety and depressive symptoms, mental health-related quality of life, and employment status at baseline, 2-, 4-, 8-, and 12-month follow-up. RESULTS At 12-month follow-up, intervention patients reported reduced anxiety (effect size [ES], 0.33-0.38; 95% confidence interval [CI], 0.04 to 0.67; P</=.02) and depressive symptoms (ES, 0.35; 95% CI, 0.25-0.46; P = .03); improved mental health-related quality of life (ES, 0.39; 95% CI, 0.10 to 0.68; P = .01); and larger improvements relative to baseline in hours worked per week (5.7; 95% CI, 0.1 to 11.3; P = .05) and fewer work days absent in the past month (-2.6; 95% CI, - 4.8 to -0.3; P = .03) than usual care patients. If working at baseline, more intervention patients than usual care patients remained working at 12-month follow-up (94% vs 79% [15% absolute difference, 0.7%-28.6%]; P = .04). CONCLUSIONS Telephone-based collaborative care for panic disorder and generalized anxiety disorder is more effective than usual care at improving anxiety symptoms, health-related quality of life, and work-related outcomes.