Although children with social phobia (SP) and selective mutism (SM) present similarly in a clinical setting, it remains unclear whether children with SM are unable to speak due to overwhelming anxiety, or whether withholding speech functions as an avoidance mechanism. A total of 35 children (ages 5-12 years) with either SM (n = 10), SP (n = 11), or no diagnosis (n = 14) participated in the current study. Measurements included clinician, child, and parent ratings as well as behavioral observations and psychophysiological measures. Independent evaluators and clinicians rated children with SM as more severely impaired, more anxious, and less socially effective, but the groups did not differ in self- or parent-reported anxiety. Psychophysiological measures indicated that children in the SM group experienced less arousal than other children during social interaction tasks. The authors postulate that lack of speech may serve as an avoidance mechanism and thus account for this lack of arousal. (Contains 3 tables and 2 figures.)