If the shared familial risk factors that predispose to psychotic disorder interact with early-life exposures in the urban environment, familial correlations of psychosis proneness measures should be higher in the exposed environment. We tested the hypothesis that in sib-pairs with one member affected by psychotic disorder, the familial correlation of psychotic experiences, but not depression, negative symptoms, or intelligence quotient (IQ), would be higher if the nonaffected sibling was raised in an urban environment until age 15 years. The sample analyzed consisted of 959 sib-pairs of whom one was affected with psychotic disorder. Lifetime self-reported psychotic and depressive experiences were measured using the self-reported “Community Assessment of Psychic Experiences” (CAPE). In the unadjusted model of the sibling-patient association in CAPE positive symptoms, there was a significant interaction by urban environment (B interaction = 0.079, 95% CI: 0.021 to 0.137, P = .007, n = 828). Stratified analyses revealed a strong sib-pair association in the urban environment (B = 0.077, 95% CI: 0.037 to 0.117, P < .001) and absence of association in the rural environment (B = −0.002, 95% CI: −0.044 to 0.039, P = .920). Associations were not affected after taking into account confounders and outliers, and there was no evidence that sibling associations in IQ, depression, or negative symptoms were moderated by the urban environment. The results agree with previous work indicating that the effects of the genetic and environmental factors that occasion familial clustering of psychotic disorder depend on whether or not an individual spends his early life in an urban environment.