Human monozygotic twins and other genetically identical organisms are almost always strikingly similar in appearance, yet they are often discordant for important phenotypes including complex diseases. Such variation among organisms with virtually identical chromosomal DNA sequences has largely been attributed to the effects of environment. Environmental factors can have a strong effect on some phenotypes, but evidence from both animal and human experiments suggests that the impact of environment has been overstated and that our views on the causes of phenotypic differences in genetically identical organisms require revision. New theoretical and experimental opportunities arise if epigenetic factors are considered as part of the molecular control of phenotype. Epigenetic mechanisms may explain paradoxical findings in twin and inbred animal studies when phenotypic differences occur in the absence of observable environmental differences and also when environmental differences do not significantly increase the degree of phenotypic variation.