Inclusion Criteria:

• Male or female ages 18-60;
• Current diagnosis of major depression, and a rating of ³15 on the HRS-D-25; - -Presence of significant, co-existing panic-agoraphobic spectrum symptoms,
• Absence of ongoing therapy with psychotropic medications (except for intermittent use of nonbenzodiazepine hypnotics) or willingness to be withdrawn from an ineffective ongoing antidepressant medications
• Physically healthy,
• Female participants of childbearing potential must be practicing a medically acceptable form of double-barrier birth control or using oral contraceptives such as birth control pills, implants, or injections;

Exclusion Criteria:

• Females who are pregnant or breast-feeding;
• History of suicide attempt in the 6 months prior to entry, active suicidal ideation, or significant suicide risk;
• History of hypersensitivity to or current use of sertraline;
• Unstable or untreated medical conditions,
• Participants who do not wish to discontinue current, ineffective antidepressant treatment;
• Participants who have recently begun psychotherapy (less than 3 months prior to study entry);
• Diagnosis of current panic disorder, psychosis, substance or alcohol abuse, anorexia, bulimia, dissociative, bipolar disorder, or any other psychiatric or medical illness that would interfere with the best treatment strategy for the potential participant.