Anxiety disorders in youth are associated with a range of psychosocial difficulties, including peer bullying. Though there is evidence to support the use of cognitive-behavioral therapy (CBT) to treat youth anxiety, little research has examined the impact of bullying on treatment. This study examined a sample of youth who received CBT for anxiety at an outpatient specialty research clinic. It was hypothesized that bullying and bullying-related impairment would moderate treatment outcome, such that bullied anxious youth and those with higher bullying-related impairment would respond less well to treatment. The study also posited that social self-efficacy and social competence would mediate treatment effects and that the indirect effect of social competence would be moderated by bullying (i.e., stronger for bullied youth). Hostile intent served as a comparison mediator and was hypothesized to not significantly mediate treatment effects. Participants (n = 52; age M =15.29 years, SD = 4.19, range = 8-25) were interviewed using a questionnaire that retrospectively assessed for bullying at the time of treatment intake. Youth diagnostic and symptom measures were completed at pre- and post-treatment assessments. Almost 40% of the sample endorsed being bullied in the school year of treatment initiation. Bullying did not moderate treatment outcome. However, among those who were bullied, highly anxious youth who also had high bullying-related impairment had poorer response to treatment. There were no indirect effects of social self-efficacy or social competence on treatment outcome, and the indirect effect of social competence was not moderated by bullying. Surprisingly, change in hostile intent emerged as the only significant mediator of change. Overall, results indicate that bullying is common among anxious, treatment-seeking youth. Results also suggest that bullying can impact response to CBT, depending upon degree of initial anxiety and bullying-related impairment. Findings also highlight the value of addressing hostility in anxious youth. Implications for clinical practice and future research are discussed.