There is no doubt that growing up in a home where one or both parents misuse alcohol is undesirable. However, it is far less certain that this predicament is responsible for psychological damage to the child in the long term. This paper reviews the literature on the psychological effects on children of parental alcohol misuse and concludes that research needs to move beyond crude comparisons between alcohol-affected and nonalcohol-affected homes to a search for the precise mechanism(s) responsible for mediating any statistical associations between parental drinking and psychological deficits in children.