Introduction: Classical twin studies show that smoking is heritable. To determine if shared family environment plays a role in addition to genetic factors, and if they interact (G×E), we use a children- of-twins design. In a second sample, we measure genetic influence with polygenic risk scores (PRS) and environmental influence with a question on exposure to smoking during childhood. Methods: Data on smoking initiation were available for 723 children of 712 twins from the Netherlands Twin Register (64.9% female, median birth year 1985). Children were grouped in ascending order of risk, based on smoking status and zygosity of their twin-parent and his/her co-twin: never smoking twin-parent with a never smoking co-twin; never smoking twin-parent with a smoking dizygotic co-twin; never smoking twin-parent with a smoking monozygotic cotwin; and smoking twin-parent with a smoking or never smoking co-twin. For 4072 participants from the Netherlands Twin Register (67.3% female, median birth year 1973), PRS for smoking were computed and smoking initiation, smoking heaviness, and exposure to smoking during childhood were available. Results: Patterns of smoking initiation in the four group children-of-twins design suggested shared familial influences in addition to genetic factors. PRS for ever smoking were associated with smoking initiation in all individuals. PRS for smoking heaviness were associated with smoking heaviness in individuals exposed to smoking during childhood, but not in non-exposed individuals. Conclusions: Shared family environment influences smoking, over and above genetic factors. Genetic risk of smoking heaviness was only important for individuals exposed to smoking during childhood, versus those not exposed (G×E). Implications: This study adds to the very few existing children-of-twins (CoT) studies on smoking and combines a CoT design with a second research design that utilizes polygenic risk scores and data on exposure to smoking during childhood. The results show that shared family environment affects smoking behavior over and above genetic factors. There was also evidence for gene-environment interaction (G×E) such that genetic risk of heavy versus light smoking was only important for individuals who were also exposed to (second-hand) smoking during childhood. Together, these findings give additional incentive to recommending parents not to expose their children to cigarette smoking.