It is safe to say that online leaning has found a permanent place in higher education. Conventional higher education institutions are also gradually embracing it across the United States. As online learning surfaces as the new model of contemporary education both in the United States and worldwide, ensuring exam integrity in the online environment is becoming a major challenge to many higher education institutions. To meet this challenge, many of these institutions are outsourcing the examination aspect of their education to online proctoring service providers. The present study, which was conducted on a total of 631 students, assesses the effect of online proctored exams on student test anxiety and exam performance. This study shows that high trait test anxiety results in lower exam scores and that this is especially true for those students with high text anxiety taking exams in an online proctored setting.