Childhood parental loss may be an important risk factor for psychiatric illness in adulthood. While this association has been carefully examined for depression, little is known about the role of parental loss in predisposing to alcoholism. We examined an epidemiological sample of female twin pairs with the same history of continuity or disruption in parent-child relationships (N = 1018 pairs; mean age 30 years), using a range of definitions of alcoholism. Childhood parental loss through separation, but not death, substantially increased the risk in adulthood for all definitions of alcoholism. Furthermore, both paternal and maternal alcoholism substantially increased the probability of parental separation from their children. Proposing a structural equation twin-family model that incorporates childhood parental loss as a specified environmental risk factor, we examined how much of the association between childhood parental loss and alcoholism was causal (i.e. mediated by environmental factors) v. non-causal (mediated by genetic factors, with parental loss serving as an index of parental genetic susceptibility to alcoholism). Both the causal and non-causal paths were significant for all definitions of alcoholism. However, the causal-environmental pathway consistently accounted for most of the association. While a significant proportion of the association is due to non-causal genetic mechanisms, childhood parental loss (or the familial discord that precedes or follows it) is probably a direct and significant environmental risk factor for the development of alcoholism in women.