What is Xanax used to treat? Xanax is a benzo medication (short for benzodiazepine) that produces a sedative effect on the brain. Doctors use this medication to treat symptoms related to anxiety and panic disorder. Xanax is a CNS depressant. It quickly relieves the sign of anxiety in a person. It works by strongly binding to a brain neurotransmitter which produces a calming effect. It ceases the extra activity of nerves and reduces anxiety. Xanax also induces sleeping which helps you in treating sleep difficulty related to anxiety.