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OBJECTIVE: The authors sought to examine psychopathological correlates of behavioral inhibition in young offspring of parents with panic disorder and/or major depression. METHOD: Behavioral inhibition, determined by using standard laboratory observations, was assessed in four groups of children (age 2–6 years): 129 children of parents with both panic disorder and major depression, 22 children of parents with panic disorder alone, 49 children of parents with major depression alone, and 84 comparison children of parents with neither panic disorder nor major depression. Psychopathology in children ≥5 years was compared between children with behavioral inhibition (N=64) and without (N=152). RESULTS: Social anxiety disorder (social phobia or avoidant disorder) was significantly more likely to be found in the children with behavioral inhibition (17%) than in those without (5%). Noninhibited children were significantly more likely than inhibited children to have disruptive behavior disorders (20% versus 6%, respectively) and had higher scores on the attention problems scale of the Child Behavior Checklist (mean=52.1 versus 50.8). CONCLUSIONS: This study adds to the growing literature suggesting an association between behavioral inhibition and social anxiety disorder and an inverse relationship between inhibition and disruptive behavior disorders.