The term endophenotype (EP) (and its approximate synonym intermediate phenotype) has been used extensively in recent discussions about genetic strategies for unraveling the etiology of psychiatric and substance use disorders.1,1–3 In this report, we attempt to provide a conceptual analysis of this construct, to identify areas of ambiguity in the previous literature and to show how it can be more clearly articulated using methods long familiar to statistical genetics. Our conceptual vehicle is structural equation modeling. Although the EP concept was originally postulated at a time when the dominant model of genetic etiology of psychiatric disorders (PDs) were single genes of moderate to large effect, the underlying logic could be equally applied to multifactorial twin and adoption studies, or linkage or association paradigms seeking to detect genes of moderate to small effect size.