It is still unknown how does Xanax (Alprazolam) manage anxiety or panic disorders. It is thought, like other benzodiazepines, Xanax works by affecting gamma-aminobutyric acid receptors in the brain. With the help of such actions, Alprazolam enhances GABA-mediated synaptic inhibition responsible for the efficacy of Alprazolam in panic disorder and panic disorder.