This study investigates the relationship between the degree of individuation in families and the personality development of adolescent family members. A subsample of 30 white, middle-class families were chosen for analysis from a larger sample of 99 families. Fifteen families from the subsample had adolescent girls who scored high, and fifteen had adolescent girls who scored low on Loevinger's measure of ego development, the California Personality Inventory, and a sociometric questionnaire. All families participated in a 2-hour structured home interview which included revealed difference exercises (RDE) for the entire family, and a projective task in which family members described their family system. Both of these tasks were used to assess the degree of "individuation" in a family. A highly individuated family is conceived as one where individual differences are accurately perceived and accepted. Family individuation should be reflected in the family's interaction process by greater comfort with ambivalence and disagreement, and by higher levels of mutual support and validation. It was hypothesized that a family climate of individuation would enhance the adolescent's development by nurturing the adolescent's self-esteem. The results confirmed this hypothesis: parents of the high-scoring adolescents were better able to accept differences between them and to discuss disagreements constructively, compared to parents of the low-scoring adolescents. (Author/SS)