There has been an abundance of research on people in confined environments. However, when investigating the negative effects associated with working or living in confined environments, the literature has generally tended to focus only on the objective characteristics of the environment. In addition, past research has tended to treat crowding and confinement as a unitary construct. The present paper provides a distinction between crowding and confinement. It also argues that research should examine the mediation of subjective environmental characteristics developed through individual perceptions. Eighty subjects were confined to rooms of varying sizes (volumes). An index to quantify perceptions of confinement was developed. A Perceptual Mediation Model is presented, and it is demonstrated that perceptions of confinement serve as the mechanism through which objective confinement influences state anxiety, negative affect, and mood. Implications for future research and its application are also discussed.