Current and lifetime psychopathology was assessed in 50 Israeli children of parents with schizophrenia who were either of kibbutz families and raised collectively with the help of child care workers, or of urban families and raised by their parents. Index subjects were compared with 50 matched control children of healthy parents by means of the Schedule for Affective Disorders and Schizophrenia-Israel. Subjects were evaluated in adulthood at a mean age of 31 years; schizophrenia was found exclusively among children of ill parents, and no effect of town or kibbutz rearing on risk for schizophrenia was observed. Major affective illness was more common among kibbutz index subjects. Affective symptomatology observed in some index parents was evenly distributed among town and kibbutz parents and was not related to the diagnosis of affective disorders in at-risk children. Current adult functioning was similar between town-and kibbutz-raised subjects (and in general reflected good adjustment); an excess of personality disorders was found among index subjects. The present findings support the concept that both familial and environmental factors operate in the expression of psychopathology.