The aim of the present investigation was to evaluate the moderating role of the physical concerns domain of anxiety sensitivity (AS) in the relation between smoking rate and panic vulnerability variables, both concurrently and prospectively, among a community-based sample of 125 daily smokers (60 females; Mage = 26.02 years, SD = 10.98). As hypothesized, there was a significant interaction between AS Physical Concerns and smoking rate in relation to agoraphobic avoidance, such that at higher levels of AS Physical Concerns and higher smoking rates, there was a risk for increased agoraphobic avoidance (3.6% unique variance). Contrary to prediction, however, the interaction between AS Physical Concerns and smoking rate did not significantly predict the tendency to catastrophize about bodily sensations, body vigilance, or lifetime history of panic attacks. In regard to the prospective analyses, there was a significant interaction between AS Physical Concerns and smoking rate in relation to Time 2 anticipatory anxiety, such that at higher levels of AS Physical Concerns and higher rates of smoking, there was a significant risk for an increase in anticipatory anxiety over the three-month follow-up period (5% unique variance). Contrary to prediction, the interaction between AS Physical Concerns and smoking rate did not significantly predict the occurrence of panic attacks during the three month follow-up period. The current findings suggest that daily smokers smoking at higher rates with high AS Physical Concerns may be more prone to engage in avoidance (Time 1 findings) and show increases in worry about potentially threatening events in the future (Time 2 anticipatory anxiety findings). This interaction appears to be relatively specific to only some aspects of panic-relevant vulnerability factors. This pattern of findings may be used to conceptually guide the refinement of etiological models of panic vulnerability that involve smoking behavior.