The present study examined the role of positive parenting on externalizing behaviours in a longitudinal, genetically informative sample. It often is assumed that positive parenting prevents behaviour problems in children via an environmentally mediated process. Alternatively, the association may be due to either an evocative gene–environment correlation, in which parents react to children's genetically influenced behaviour in a positive way, or a passive gene–environment correlation, where parents passively transmit a risk environment and the genetic risk factor for the behavioural outcome to their children. The present study estimated the contribution of these processes in the association between positive parenting and children's externalizing behaviour. Positive parenting was assessed via observations at ages 7, 9, 14, 24 and 36 months and externalizing behaviours were assessed through parent report at ages 4, 5, 7, 9, 10, 11 and 12 years. The significant association between positive parenting and externalizing behaviour was negative, with children of mothers who showed significantly more positive parenting during toddlerhood having lower levels of externalizing behaviour in childhood; however, there was not adequate power to distinguish whether this covariation was due to genetic, shared environmental or nonshared environmental influences. Copyright © 2011 John Wiley & Sons, Ltd.