The occurrence of self-reported asthma/wheezing and hay fever among 3,808 pairs of twins from the Australian National Health and Medical Research Council Twin Registry was examined for evidence of genetic transmission by path analytic methods. The cumulative prevalence of asthma or wheezing was 13.2% and of hay fever, 32%. There were significant correlations in liability to reported disease among twins, and these were higher in monozygotic twins (MZ) (r = 0.65) than in dizygotic twins (DZ) (r = 0.25), and in male MZ twins (r = 0.75) compared with female MZ twins (r = 0.60). Analysis under the assumptions of the classic twin model suggested that there were genetic factors common to asthma and hay fever, with a correlation in genetic liability to the traits of 0.52 for men and 0.65 for women. These genes acted substantially in a nonadditive fashion in men but not in women. As the genetic correlation was significantly less than unity, this implied additional genetic factors influencing either or both diseases individually. The estimated heritability of these diseases was 60 to 70% in this population. Environmental causes of both diseases also were correlated (r = 0.53 for men and 0.33 for women). Cigarette smoking was only weakly associated with wheezing.