A 4-year prospective study was undertaken of the families of 137 newly referred English speaking psychiatric patients with children at home aged under 15 years. The group comprised a representative sample of such patients living in one inner London borough. Teacher questionnaires were obtained yearly for all children of school age in the families, and for age-, sex- and classroom-matched controls. Detailed standardized interviews were undertaken yearly with parent-patients and with their spouses. A comparison was also made with a control group of families in the general population with 10-year-old children. Patients' families differed in terms of a higher rate of psychiatric disorder in spouses and a much higher level of family discord. Both parental mental disorder and marital discord tended to persist over the 4-year period, but persistence of both was much more marked when the parent had a personality disorder. The children of psychiatric patients had an increased rate of persistent emotional/behavioural disturbance, which tended to involve disorders of conduct. The psychiatric risk to the children was greatest in the case of personality disorders associated with high levels of exposure to hostile behaviour. Boys showing temperamental risk features were most vulnerable to the ill-effects associated with parental mental disorder.