This study compared self and observer ratings of social performance and anxiety among individuals with social anxiety disorder, nonclinical controls, and participants with dysthymia serving as clinical controls. The purpose was to elucidate whether self-perceptions of individuals with social anxiety disorder reflect observable performance and anxiety differences, negative self-perceptions, or an interaction of the two. Participants engaged in three role-played interactions, and self and observer ratings of performance and anxiety were obtained. In general, self-ratings of anxiety and performance were more negative (greater anxiety and poorer performance) than were observer ratings. Interactions of rating source and diagnosis indicated the discrepancy between self and observer ratings of both anxiety and performance was significantly greater among participants with social anxiety disorder. Observers, however, generally noted differences across the groups in both anxiety and performance. The discrepancies between self and observer ratings of anxiety were related to negative evaluation fears and negative thought patterns, while performance discrepancies were related to negative thought patterns. Treatment implications are discussed.