Recent data suggest that genes influence three domains of great importance to family researchers. First, it is now well established that genes influence a broad range of developmental outcomes such as cognitive functioning, personality differences, and psychopathology in children, adolescents, and adults. Second, data show genetic influences on family variables that are thought to influence those outcomes. For example, genes influence self-report and direct observational measures of parenting behaviors. Third, genes account for a great deal of the covariance be tween measures of family process and developmental outcomes. For example, in studies of families of adolescents, genes play a major role in observed associations between negative and harsh parenting, on the one hand, and antisocial behavior in the adolescents, on the other. The influence of genes, not only on variances, but also on covariances, constitutes art important challenge to current developmental theory. Aspects of this challenge are discussed.