Seven male children of severely ill manic-depressive parents (five of whom had a unipolar depressed spouse) were studied at one and at two years of age. They showed a range of adjustment problems when assessed in a laboratory setting (protocol # 78-M- 75). They had insecure attachment relationships with their caregivers and had problems in regulation of affect. Disturbances in empathy and aggression also were evident. Psychological and psychiatric assessments of the children were conducted four years later to determine whether problems identified earlier were transitory or persistent and indicated possible precursors of later diagnosable disturbance. On the follow-up at five and six years of age, these children differed from a control groups on many dimensions of functioning. In a psychiatric interview, they reported more fears, worries, symptoms of depression and distortions in self- image. Their mothers indicated a high incidence of externalizing, as well as internalizing symptoms in the children. Proband children received more formal (DSM-III) psychiatric diagnoses than control children. Deficits in empathy and non- assertive strategies for resolving conflict also were identified. Many of the problems persisted over time, even for children who were in therapy, for whom change was evident. These patterns underscore the need for early intervention in families such as these in which both parents are depressed and in which there is a familial history of affective disorder as well.