A pediatric and neurological study of 62 retarded psychotic children revealed more family psychopathology, complications of pregnancy, and serious postnatal illness than in a control group. Motor development and speech development were slow in psychotic children, but obstetrical complications at the time of birth were not significantly more frequent than in controls. Abnormal physical findings in psychotic children were mainly congenital anomalies. Neurological deficits included mental retardation, speech defects, strabismus, and other non-localizing signs. EEG tracings were abnormal in 27 of 51 psychotic patients. At least 46 of the 62 psychotic children studied had evidence of organic brain disease.Although an inadequate family background may be associated with the development of psychosis, a severe disturbance of temporal and frontal lobe function may produce psychotic symptoms with or without familial predisposition.