This paper examines the determinants of child health in rural Ethiopia for the period 1994-97 using height-for-age z-scores as measures of long-term health. The panel nature of the data helps to control for community, household and individual level heterogeneity. Unlike most previous studies, the influence of parental health on children is examined. In addition, the role of genetic endowments in the relationship between child and parental health is analysed. Unlike most studies in the health literature, no significant correlation between children’s health and per capita expenditures is found. This reinforces the widespread suspicion that most income coefficients in the literature are biased upwards due to correlation between unobservable heterogeneity and income levels. But the height of parents is highly significant in all specifications. Even though most prices are not significant, the prices of food items that are mostly consumed by children are significantly and negatively related to child health. Birth order has a significant impact on the health of children; older children are taller than their younger siblings. Female children have better height-for-age z-scores than males. Since the health of children deteriorates with their age, deprivations in later years are probably more important than during pre- or neo-natal periods. This seems to be confirmed by the statistical insignificance of a dummy variable that identifies children born in a year when the household lost substantial harvest due to drought. The number of siblings of the wife significantly and negatively affects the health of children; but that of the head is not significant. As females control the management of housework and food preparation, their siblings probably compete with their children more than that of the husband’s. Years of marriage, probably reflecting stability in marriage, have a beneficial impact on child health. Altitude has a significant negative impact on the health of children. Finally, correlations between child and parental health are mainly explained by genetic inheritance than by behaviour. In an environment where there are no radical differences in the nutritional and disease environments of parents and children, the importance of genetic endowments in determining child health should not be underestimated.