The purpose of the present study of people with recurrent vertigo (dizziness/dysequilibrium) was (a) to determine whether negative perceptions of symptoms contribute to handicap, and (b) to examine the physical and psychological factors predicting handicap over a seven‐month period. Questionnaires assessing symptoms, anxiety and depression, handicap, and beliefs about the potential consequences of vertigo attacks were completed by 101 patients suffering from vestibular disorders. Three clusters of beliefs were identified: concern about loss of control, fear of serious illness, and anticipation of a severe attack. Fear of losing control and reported autonomic symptoms were significantly related to raw and residualized handicap scores, after controlling for somatization, vertigo severity, anxiety and depression. Initial levels of somatization predicted residualized handicap and emotional distress, while handicap levels predicted future emotional distress and vertigo. Negative perceptions of symptoms may contribute to an escalating cycle of vertigo, anxiety and restriction of activity.