Engel’s biopsychosocial model is the current paradigm for psychiatric diagnosis, case formulation and treatment planning. The “biopsychosocial psychiatrist” understands that family is the earliest and most immediate social milieu. Family psychiatry provides the ideal bridge between the biomedical and psychosocial worlds. Family Systems Theory adds consideration of family and individual life cycles to the integration of biomedical, psychosocial, and behavioral dimensions. Application of family systems theory and therapy helps optimize the treatment and rehabilitation of individuals with severe and persistent psychiatric illnesses. In the family systems model poorly differentiated relationship patterns characterized by high anxiety and emotional reactivity impair optimal functioning. Therapeutic interventions are focused on direct assessment and change of counterproductive family relationship patterns that maintain symptomatic behavior. Reciprocal influences between biology, individuals, their families, and other social systems operate in cycles that maintain or reinforce disturbed behavior in the identified patient. Functional improvement results when emotional reactivity no longer blocks intellectual process. Recent reports from the Systematic Treatment Enhancement Program for Bipolar Disorder (STEP-BD) indicate that intensive psychosocial interventions are effective and have multiple benefits for individuals with bipolar disorder. Pharmacotherapy is first-line treatment for acute bipolar disorder episodes but of limited efficacy in resolving the disabilities highlighted in the DSM “functioning clause”. STEP-BD reports confirm the efficacy of Family Focused Therapy (FFT) to reduce time to recovery, delay relapse/recurrence, reduce relapse rates, improve patient functioning, reduce interepisode symptoms, improve medication compliance, and increase total time in recovery. Psychotherapy interventions are key components in effectively managing bipolar disorder Current evidence supports increased emphasis on family-oriented psychiatric practice. The Residency Review Committee for Psychiatry core competencies require psychiatric residents to be specifically taught how to assess the patient within the family and larger social system, how to formulate a treatment plan that includes these psychosocial elements, and how to support the family system. APA practice guidelines for schizophrenia, bipolar disorder, major depression, panic disorder, eating disorders, alcohol dependence and substance abuse disorders all include recommendations for early family involvement. Family psychiatry addresses the familial, social and interpersonal aspects of theses illnesses. Management of biologically based severe mental illnesses occurs within the context of ongoing transactional processes that can influence their future course and outcome. Family systems theory provides a practical and constructive approach for psychotherapy, allowing individuals to explore the rules of their family of origin, their role in it, and how that impacts their current relationships. Treatment techniques includes creating a multi-generation genogram that explores the functioning of a family as a whole; conducting interviews with parents, siblings and children; and boundary setting exercises to help the person shift nonproductive family patterns.