Xanax is a benzodiazepine (ben-zoe-dye-AZE-eh-peen). It is thought that alprazolam works by enhancing the activity of certain neurotransmitters in the brain. Xanax is used to treat anxiety disorders and anxiety caused by depression. Xanax is also used to treat panic disorders with or without a fear of places and situations that might cause panic, helplessness, or embarrassment (agoraphobia).