We evaluated the resting electroencephalogram (EEG) of 50 first-episode schizophrenia patients and 55 of their relatives, 31 first-episode bipolar patients and 35 of their relatives, and 113 nonpsychiatric subjects and 42 of their relatives. The frequency characteristics of the EEG showed moderate stability for a subgroup of these subjects (n = 106) who were tested twice, approximately 9 months apart. Both the schizophrenia and bipolar patients showed a generalized pattern of increased delta and theta and decreased alpha activity. The bipolar patients demonstrated additional right hemisphere activity that was not present among the schizophrenia patients and nonpsychiatric subjects, a finding consistent with hypotheses concerning nondominant hemisphere involvement in the regulation of elated mood. The schizophrenia patients' female relatives and/or relatives with affective disorders and the bipolar patients had significantly reduced peak alpha frequencies. This finding may be related to reduced information processing capacity among these subjects.