Objective: To review the literature investigating the effects of parental affective illness on children over the past decade. Method: A computerized search of articles published over the past 10 years was completed. Articles were reviewed and relevant studies are presented. Results: Over the course of the past 10 years a number of longitudinal studies have confirmed that children of affectively ill parents are at a greater risk for psychiatric disorders than children from homes with non-ill parents. Life table estimates indicate that by the age of 20 a child with an affectively ill parent has a 40° chance of experiencing an episode of major depression. Children from homes with affectively ill parents are more likely to exhibit general difficulties in functioning, increased guilt, and interpersonal difficulties as well as problems with attachment. Marital difficulties, parenting problems, and chronicity and severity of parental affective illness have been associated with the increased rates of disorder observed in these children. Conclusion: The presence of depression in parents should alert clinicians to the fact that their children also may be depressed and therefore in need of services.