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This third report from a longitudinal study of lesbian families presents data obtained from interviews with mothers of five-year-old children conceived by donor insemination. Results indicated that 87% of the children related well to peers, 18% had experienced homophobia from peers or teachers, and 63% had grandparents who frankly acknowledged their grandchild's lesbian family. Of the original couples, 31% had divorced. Of the remainder, 68% felt that their child was equally bonded to both mothers. Concerns of lesbian families are discussed.