This article reviews evidence for three mechanisms whereby psychological factors may aggravate dizziness and retard recovery from balance disorders. Firstly, a common behavioral response to dizziness is to avoid activities and environments that provoke symptoms, yet such avoidance deprives the individual of the exposure necessary to promote psychological and neurophysiological adaptation. Secondly, anxiety arousal and hyperventilation may add to, amplify, and disinhibit the somatic symptoms induced by balance disorder. Thirdly, attention and cognitive load may influence the central processing of information required for the perception and control of orientation. The need to combine physiotherapy for dizziness with psychotherapy is discussed.