The present experiment was designed to investigate differences in perception between parents of normal and problem children and to related these differences to behavior observed in the home environment. Subjects were brought into the laboratory and asked to “track” positive and negative behavior on a written script portraying family interactions by underlining them with colored pens. Tallies of correct and incorrect responses were analyzed using the signal detection procedure to produce measures of sensitivity and labeling criterion for positive and negative behaviors. These analyses revealed taht parents of normal children were more sensitive to “occurrences” of positive behaviors than were parents of distressed children. Correlations between these responses and data obtained for a subset of the subjects from one-hour home observations, using a newly developed home observational coding system, revealed a number of relationships between these sets of variables.