Levels of parental expressed emotion (EE) are prospectively associated with the symptomatic course of a range of childhood psychiatric disorders. This article reviews the literature linking parental EE to youth psychopathology and proposes a novel framework for understanding its mechanisms of action. We find that, despite noteworthy methodological limitations, parental EE is linked consistently to a more deleterious course of mood, anxiety, and psychotic disorders in youth. Its mechanism of action is unknown. Models of “toxic family stress” (referring to frequent, sustained, and uncontrollable stress without protective influences) provide one framework for understanding how high EE environments interact with individual biological vulnerabilities to promote illness onset and recurrence. Research aimed at understanding biological responses (e.g., stress reactivity, arousal) to familial EE is needed. Such work may inform efforts to understand how EE affects the course of psychiatric disorders and may guide the development of novel interventions emphasizing emotion regulation strategies.