This study investigated event-related potential (ERP) indices of information processing in sufferers of panic disorder (PD). ERPs were recorded from 14 PD patients and 15 controls during an auditory target detection task. The task required subjects to discriminate infrequent target tones (p = .14; 2000 Hz) from frequent (p = .72; 1000 Hz) and infrequent (p = .14; 500 Hz) distractor tones. A frontal P300 (P3a) identified in the PD group was characteristic of activity that would be expected to novel, task-irrelevant stimuli and is consistent with junctional pathology involving the prefrontal-limbic pathways. This study provides psychophysiological evidence of an abnormality in PD of the brain's processing of physical changes in the stimulus field that occurs even under conditions of low stimulus load. It may assist in helping to understand the breakdown in information processing that occurs in PD under high load conditions such as crowds and supermarkets.