Research investigating the relations among poverty, home environment, and child outcomes within biologically related families has the potential to confound genetic and environmental influences, but conventional behavioral genetic methods have serious limitations for understanding environmental influences. Careful and thorough measurement of the environment, recognition of the complex interactions of genotypes with environments, and specification of the populations of individuals and environments sampled are critical for such studies. Multiple methods, including carefully controlled multivariate longitudinal studies and random assignment experiments, provide strong evidence that poverty and related experiences influence children's development through environmental processes that go well beyond genetically transmitted attributes. Parents' poverty or affluence is due in part to individual abilities and personality characteristics, but is also a function of economic and social structural conditions as well as opportunity structures available to them as a consequence of their race, ethnic group, and gender. (C) 1997 Academic Press.