With a sample of 242 twins (135 girls, 107 boys) studied longitudinally, behavioral inhibition (BI) and inhibitory control (IC) measured at 3 years, as well as early and concurrent family process variables, were examined as predictors of shyness and of anxiety symptoms approximately 4 years later. Structured observational data from laboratory and home contexts were used in conjunction with parent and experimenter ratings. A key goal was to extend previous findings of the positive relationship between early BI and anxiety development by incorporating the consideration of IC and family process variables. Using hierarchical linear modeling with restricted maximum likelihood estimation to adjust for twin dependency, early BI (b = 0.37, p < .01), IC (b = 0.14, p < .05), and concurrent lower family stress (b = -0.22, p < .05) predicted shyness during middle childhood. Findings were similar for parent-rated and laboratory-based shyness measures. Anxiety symptoms were predicted by BI (b = 0.14, p < .05), early negative family affect (b = 0.20, p < .05), and family stress in middle childhood (b = 0.26, p < .05). These findings clarify the relative importance of temperament and family factors in the development of both shyness and anxiety symptoms during childhood.