Research in children of mothers with schizophrenia (HRsz children) has focused on identifying the early antecedents of adult illness to understand its intergenerational (primarily genetic) transmission. From a developmental psychopathology perspective, the vulnerability of HRsz children may result from multiple environmental factors interacting with ongoing developmental processes. The objectives were: (1) to understand the extent to which having a mother with schizophrenia impacts on developmental and clinical trajectories; (2) to review whether research supports a proposed model for the non-genetic transmission of risk in HRsz offspring; (3) to discuss the implications of the model for early intervention. HRsz children show vulnerability in a range of areas throughout childhood, but the findings are not unanimous in any single domain, and poor developmental functioning in any given domain does not necessarily predict morbidity. Broad support for a developmental psychopathology model is provided by studies suggesting a generalised vulnerability and studies on the impact of psychosocial factors. However, little empirical research has elucidated specific proximal social environmental influences through development. Gaps in the literature are identified where studies in depressed mothers and other groups are potentially informative, and which suggest that conventional psychological therapies may not be sufficient to enhance offspring outcomes. Future research could inform our understanding of developmental psychopathology and the development of preventative interventions.