Aim: To study the prevalence of psychiatric diagnosis and psychopathology in adolescent offspring of parents with panic disorder, depression and normal controls. Methods: Adolescent offspring (11-16 years) of parents with a diagnosis of panic disorder and major depression, and normal controls were interviewed using Missouri Assessment of Genetics Interview for Children (MAGIC), Scale for Childhood Anxiety Related Emotional Disorders (SCARED), Strengths and Difficulties Questionnaire (SDQ) and the Children's Global Assessment Scale (CGAS). Results: Thirty three adolescent offspring of parents with panic disorder, 47 of parents with unipolar depression, and 37 of normal controls were interviewed. A diagnosis of simple phobia was made significantly more often in adolescent offspring of parents with panic disorder compared to controls. Adolescent offspring of parents with depression had significantly higher rates of panic disorder and depression compared to controls. The total scores on SCARED and SDQ were significantly higher among the offspring of parents with panic disorder and depression compared to controls and the former were more functionally impaired. Conclusions: There was an excess prevalence of psychopathology and a greater degree of functional impairment in adolescent offspring of parents with panic disorder and depression compared to adolescent offspring of normal controls. (Contains 2 tables.)