ABSTRACT: This secondary analysis of the Child/Adolescent Anxiety Multimodal Study (CAMS) used baseline patient characteristics to identify prognostic subgroups of children based on likelihood of remission. We also investigated predictors and moderators of outcome. CAMS randomized 488 youths with generalized, social, and separation anxiety disorders to cognitive behavioral therapy (CBT), sertraline, both, or pill placebo. Outcomes were Week 12 child, parent, and independent evaluator (IE) ratings of child anxiety. We used receiver operating characteristics analysis and stepwise regression to identify predictors and moderators of outcome. Severe anxiety, lower socioeconomic status, and comorbid obsessive-compulsive disorder predicted higher IE-rated anxiety posttreatment; child-rated social anxiety predicted poorer outcomes reported by all informants. Regarding moderators, Hispanic ethnicity predicted higher IE-rated anxiety after CBT and higher parent-rated anxiety after sertraline. In youths with severe anxiety (Pediatric Anxiety Rating Scale ? 20, <italic>n</italic> = 220), combination treatment increased remission (relative risk [RR] = 2.85, <italic>p</italic> < .001), 95% confidence interval (CI) [1.51, 5.39], whereas CBT (RR = 1.55, <italic>p</italic> = .20), 95% CI [0.77, 3.10], and sertraline (RR = 1.27, <italic>p</italic> = .53), 95% CI [0.59, 2.73], did not significantly increase remission relative to placebo. These are the first findings demonstrating that a combination of CBT and a selective serotonin reuptake inhibitor, not monotherapy, is likely key for achieving remission in severe anxiety. CAMS was not powered to detect treatment efficacy after stratification by anxiety severity, so further research is needed regarding effective treatments in severe anxiety. Our main effect findings suggest youth with severe anxiety (especially social phobia), low socioeconomic status and obsessive-compulsive disorder benefit less from current first-line treatments relative to other anxious youth. ClinicalTrials.gov: NCT00052078.