Previous studies of childhood traumatic brain injury (TBI) have emphasized injury-related variables rather than environmental factors as predictors of recovery. We addressed this concern using data collected during a prospective study of children with either TBI or orthopedic injuries (OI) and their families. Participants included 53 children with severe TBI, 56 with moderate TBI, and 80 with OI, all from 6 to 12 years of age at the time of injury. Measures of the preinjury family environment were collected shortly after the injury (baseline). Child cognitive and behavioral outcomes were assessed at baseline and at 6- and 12-month follow-ups. Individual growth curve analyses showed that measures of the preinjury family environment consistently predicted both the level of cognitive and behavioral functioning at 12 months postinjury and the rate of intraindividual change during the 12-month follow-up period, even after taking into account group membership and injury severity. In some cases, the preinjury family environment was a significant moderator of the effect of TBI, buffering its impact in high-functioning families and exacerbating it in low-functioning families. Thus, preinjury environmental factors predict recovery following TBI in children, even after accounting for injury-related variables. (JINS, 1997, 3, 617–630.)