Cognitive and attentional deficits were assessed in children with either a schizophrenic, and affectively disordered or a normal parent. The children were grouped both by their parents' DSM-II diagnoses (broadly defined group of schizophrenics and heterogeneous group of depressives)and by a new set of diagnoses (narrowly defined group of schizophrenics, unipolar depressive group and bipolar group). Children whose parents met the more stringent criteria for schizophrenia performed somewhat more deviantly than children whose parents met only DSM-II criteria. In addition, the importance of splitting the heterogeneous depressive group into more homogeneous subgroups is indicated by the findings that children of unipolar parents generally could not be distinguished from children whose parents are schizophrenic. On the other hand, children of bipolar parents performed reliably better than children of schizophrenics. These findings are viewed within the context of current high-risk studies and psychological deficit literature and suggest that diagnostic issues require more attention by researchers in these areas.