The way people respond to and recover from stress is a core aspect of emotion regulation, making it important to understand when and how stress response systems become dysregulated. In this article, I discuss a program of research designed to clarify the origins of stress regulation or dysregulation within families. My study highlights how parents with mood dysregulation shape their children's developing stress sensitivity via both inherited and social‐environmental paths, and how such sensitivity aids or impairs regulation depending on the environmental context. The work also points to ways in which the family environment continues to modulate stress sensitivity over time, framing regulation as a dynamic interplay among early and later parental influences, and current conditions, rather than a static outcome. I also discuss implications for conceptualizing stress regulation and points of intervention.