OBJECTIVES: This study investigated whether there were differences in coping strategies and self-esteem between offspring of parents with bipolar disorder (high-risk) and offspring of unaffected parents (control), and whether these psychological factors predicted the onset and recurrence of mood episodes. METHODS: High-risk and control offspring were followed longitudinally as part of the Flourish Canadian high-risk bipolar offspring cohort study. Offspring were clinically assessed annually by a psychiatrist using semi-structured interviews and completed a measure of coping strategies and self-esteem. RESULTS: In high-risk offspring, avoidant coping strategies significantly increased the hazard of a new onset Diagnostic and Statistical Manual of Mental Disorders, 4th Edition twice revised mood episode or recurrence (hazard ratio: 1.89, p = 0.04), while higher self-esteem significantly decreased this hazard (hazard ratio: 2.50, p < 0.01). Self-esteem and avoidant coping significantly interacted with one another ( p < 0.05), where the risk of a Diagnostic and Statistical Manual of Mental Disorders, 4th Edition twice revised new onset mood episode or recurrence was only significantly increased among high-risk offspring with both high avoidant coping and low self-esteem. CONCLUSION: A reduction of avoidant coping strategies in response to stress and improvement of self-esteem may be useful intervention targets for preventing the new onset or recurrence of a clinically significant mood disorder among individuals at high familial risk.