Most noninfectious disease is caused by low-penetrance alleles interacting with other genes and environmental factors. Consider the simple setting where a diallelic autosomal candidate gene and a binary exposure together affect disease susceptibility. Suppose that one has genotyped affected probands and their parents and has determined each proband's exposure status. One proposed method for assessment of etiologic interaction of genotype and exposure, an extension of the transmission/disequilibrium test, tests for differences in transmission of the variant allele from heterozygous parents to exposed versus unexposed probands. We show that this test is not generally valid. An alternative approach compares the conditional genotype distribution of unexposed cases, given parental genotypes, versus that of exposed cases. This approach provides maximum-likelihood estimators for genetic relative-risk parameters and genotype-exposure-interaction parameters, as well as a likelihood-ratio test (LRT) of the no-interaction null hypothesis. We show how to apply this approach, using log-linear models. When a genotype-exposure association arises solely through incomplete mixing of subpopulations that differ in both exposure prevalence and allele frequency, the LRT remains valid. The LRT becomes invalid, however, if offspring genotypes do not follow Mendelian proportions in each parental mating type-for example, because of genotypic differences in survival-or if a genotype-exposure association reflects an influence of genotype on propensity for exposure-for example, through behavioral mechanisms. Because the needed assumptions likely hold in many situations, the likelihood-based approach should be broadly applicable for diseases in which probands commonly have living parents.