Environmental measures used widely in the behavioral sciences show nearly as much genetic influence as behavioral measures, a critical finding for interpreting associations between environmental factors and children's development. This research depends on the twin method that compares monozygotic and dizygotic twins, but key aspects of children's environment such as socioeconomic status (SES) cannot be investigated in twin studies because they are the same for children growing up together in a family. Here, using a new technique applied to DNA from 3000 unrelated children, we show significant genetic influence on family SES, and on its association with children's IQ at ages 7 and 12. In addition to demonstrating the ability to investigate genetic influence on between-family environmental measures, our results emphasize the need to consider genetics in research and policy on family SES and its association with children's IQ.