Acceptance and commitment therapy (ACT) has a small but growing database of support. One hundred and one heterogeneous outpatients reporting moderate to severe levels of anxiety or depression were randomly assigned to traditional cognitive therapy (CT) or to ACT. To maximize external validity, the authors utilized very minimal exclusion criteria. Participants receiving CT and ACT evidenced large, equivalent improvements in depression, anxiety, functioning difficulties, quality of life, life satisfaction, and clinician-rated functioning. Whereas improvements were equivalent across the two groups, the mechanisms of action appeared to differ. Changes in “observing” and “describing” one's experiences appeared to mediate outcomes for the CT group relative to the ACT group, whereas “experiential avoidance,” “acting with awareness,” and “acceptance” mediated outcomes for the ACT group. Overall, the results suggest that ACT is a viable and disseminable treatment, the effectiveness of which appears equivalent to that of CT, even as its mechanisms appear to be distinct.