Acute anxiety impacts cognitive performance. Inhalation of air enriched with carbon dioxide (CO2) in healthy humans provides a novel experimental model of generalised anxiety, but has not previously been used to assess cognition. We used inhalation of 7.5% CO2 to induce acute anxiety and autonomic arousal in healthy volunteers during neuropsychological tasks of cognitive flexibility, emotional processing and spatial working memory in a single-blind, placebo-controlled, randomized, crossover, within-subjects study. In Experiment 1 (n = 44), participants made significantly more extra-dimensional shift errors on the Cambridge Neuropsychological Test Automated Battery (CANTAB) Intra-Extra Dimensional Set Shift task under CO2 inhalation compared with 'normal' air. Participants also had slower latencies when responding to positive words and made significantly more omission errors for negative words on the CANTAB Affective Go/No-go task. In Experiment 2 (n = 28), participants made significantly more total errors and had poorer heuristic search strategy on the CANTAB Spatial Working Memory task. In both experiments, CO2 inhalation significantly increased negative affect; state anxiety and fear; symptoms of panic; and systolic blood pressure/heart rate. Overall, CO2 inhalation produced robust anxiogenic effects and impaired fronto-executive functions of cognitive flexibility and working memory. Effects on emotional processing suggested a mood-congruent slowing in processing speed in the absence of a negative attentional bias. State-dependent effects of anxiety on cognitive-emotional interactions in the prefrontal cortex warrant further investigation.