Research clearly shows that both nature and nurture play important roles in the genesis of psychopathology. In this paper, we focus on 'gene-environment interaction' in mental disorders, using genetic control of sensitivity to the environment as our definition of that term. We begin with an examination of methodological issues involving gene-environment interactions, with examples concerning psychiatric and neurological conditions. Then we review the interactions in psychiatric disorders using twin, adoption and association designs. Finally, we consider gene-environment interactions in selected neurodevelopmental disorders (autism and schizophrenia).