Previous work has demonstrated that three overarching vulnerabilities–genetic, environmental, and temperamental–contribute to the development of child anxiety. The purpose of our study was to assess: (a) the relationship between an environmental vulnerability, family enmeshment, and child anxiety; (b) whether parental anxiety accounts for this relationship; and (c) whether this relationship is mediated by levels of child Behavioral Inhibition System sensitivity, a highly persistent temperamental variable demonstrating positive associations with child anxiety. Our study included 38 Canadian parent–child dyads from an urban area, of which 33 children were Caucasian and 18 were girls. Children were aged 9 or 11 years (M = 10.21, SD = 1.07). Children completed measures of anxiety and sensitivity towards threat and parents completed measures of family enmeshment. The results supported a significant positive relationship between family enmeshment and child anxiety; parental anxiety did not account for this relationship; and the relationship was partially mediated by Behavioral Inhibition System sensitivity. Specifically, when the effect of Behavioral Inhibition System sensitivity was controlled for, the association between family enmeshment and child anxiety became non-significant. The results suggest that family enmeshment is associated with levels of child anxiety largely through the function of children’s sensitivity to threat. Enmeshed families may increase children’s susceptibility to anxiety through their effect on child temperament, specifically sensitivity to threat.