The literature on transgenerational transmission of Holocaust trauma has grown into a rich body of unique psychological knowledge with almost 400 publications. For the time being, however, the transgenerational effect of the Holocaust on the offspring remains a subject of considerable controversy. The main question involves the presence or absence of specific psychopathology in this population. Psychotherapists kept reporting various characteristic signs of distress while research failed to find significant differences between offspring and comparative groups. In an effort to settle this question, the present review of the research literature provides a summary of the findings of 35 comparative studies on the mental state of offspring of Holocaust survivors, published between 1973-1999. This extensive research indicates rather conclusively that the non-clinical population of children of Holocaust survivors does not show signs of more psychopathology than others do. Children of Holocaust survivors tend to function rather well in terms of manifest psychopathology and differences in the mental state of offspring and people in general are small according to most research. The clinical population of offspring, however, tend to present a specific "psychological profile" that includes a predisposition to PTSD, various difficulties in separation-individuation and a contradictory mix of resilience and vulnerability when coping with stress.