Women referred to a familial breast cancer clinic completed questionnaires before and after counselling and at annual follow-up to assess their risk estimate and psychological characteristics. The aims were to determine whether those who attended the clinic overestimated their risk or were highly anxious and whether counselling influenced risk estimates and levels of distress. Women (n = 450) at this clinic were more likely to underestimate (39%) than overestimate (14%) their risk. Mean trait anxiety scores were higher than general population data (t = 4.9, n = 1059, P<0.001) but not significantly different from published data from other screening samples. Overestimators (z = 5.69, P<0.0001) and underestimators (z = -8.01, P<0.0001) reported significantly different risk estimates (i.e. increased accuracy) after counselling, but significant inaccuracies persisted. Over- (n = 12) and underestimators (n = 60) were still inaccurate in their risk estimates by a factor of 2 after counselling. Thirty per cent of the sample scored above the cut-off (5/6) for case identification on a screening measure for psychological distress, the General Health Questionnaire (GHQ). GHQ scores were significantly lower after counselling (t = 3.6, d.f. = 384, P = 0.0004) with no evidence of increasing risk estimate causing increased distress. The risk of distress after counselling was greater for younger women and those who were more distressed at first presentation. The counselling offered was effective in increasing the accuracy of risk perceptions without causing distress to those who initially underestimated their risk. It is worrying that inaccuracies persisted, particularly as the demand for service has since reduced the consultation time offered in this clinic. Further work is needed to evaluate alternative models of service delivery using more sophisticated methods of assessing understanding of risk.