Behavioral exposure therapy of anxiety disorders is believed to rely on fear extinction. Because preclinical studies have shown that glucocorticoids can promote extinction processes, we aimed at investigating whether the administration of these hormones might be useful in enhancing exposure therapy. In a randomized, double-blind, placebo-controlled study, 40 patients with specific phobia for heights were treated with three sessions of exposure therapy using virtual reality exposure to heights. Cortisol (20 mg) or placebo was administered orally 1 h before each of the treatment sessions. Subjects returned for a posttreatment assessment 3–5 d after the last treatment session and for a follow-up assessment after 1 mo. Adding cortisol to exposure therapy resulted in a significantly greater reduction in fear of heights as measured with the acrophobia questionnaire (AQ) both at posttreatment and at follow-up, compared with placebo. Furthermore, subjects receiving cortisol showed a significantly greater reduction in acute anxiety during virtual exposure to a phobic situation at posttreatment and a significantly smaller exposure-induced increase in skin conductance level at follow-up. The present findings indicate that the administration of cortisol can enhance extinction-based psychotherapy.