Background. Structural brain volume abnormalities are among the most extensively studied endophenotypes in schizophrenia. Bivariate genetic model fitting (adjusted to account for selection) was used to quantify the genetic relationship between schizophrenia and brain volumes and to estimate the heritability of these volumes.Method. We demonstrated by simulation that the adjusted genetic model produced unbiased estimates for endophenotype heritability and the genetic and environmental correlations. The model was applied to brain volumes (whole brain, hippocampus, third and lateral ventricles) in a sample of 14 monozygotic (MZ) twin pairs concordant for schizophrenia, 10 MZ discordant pairs, 17 MZ control pairs, 22 discordant sibling pairs, three concordant sibling pairs, and 114 healthy control subjects.Results. Whole brain showed a substantial heritability (88%) and lateral ventricles substantial common environmental effects (67%). Whole brain showed a significant genetic correlation with schizophrenia, whereas lateral ventricles showed a significant individual specific correlation with schizophrenia. There were significant familial effects for hippocampus and third ventricle, but the analyses could not resolve whether these were genetic or environmental in origin (around 30% each).Conclusions. Using genetic model fitting on twin and sibling data we have demonstrated differential sources of covariation between schizophrenia and brain volumes, genetic in the case of whole brain volume and individual specific environment in the case of lateral ventricles.