Purpose: Many child-, hearing-, and device-related factors contribute to spoken language outcomes in children who are deaf and hard of hearing (DHH). Recently, the family environment has been implicated as another contributing factor in language development. However, most studies on the role of families in language outcomes of children who are DHH are cross-sectional in nature and fail to draw directional conclusions. This study investigated the bidirectional relationship between attributes of the family environment and the spoken language outcomes of DHH children by examining data collected over approximately 1 year. Method: Caregiver--child dyads composed of 57 typically hearing (TH) children and 53 DHH children and their primary caregiver completed a standardized, self-report family environment assessment, along with three standardized measures of receptive language at two separate home visits, separated by approximately 1 year. Results: Family environments of DHH and TH children did not differ significantly. In the DHH and TH groups, families that reported placing a greater emphasis on intellectual and cultural pursuits at the initial visit (T1) had children with better language outcomes at the second visit (T2), above and beyond the contribution of T1 language. Additionally, in the DHH group only, families that reported a greater emphasis on achievement and competition at T1 had children with poorer language skills at T2. Conclusions: Families that emphasize intellectual-cultural environments had DHH and TH children with better language skills 1 year later, whereas those that deemphasized competition and perfection had DHH children with better language skills 1 year later. These findings highlight the importance of family environment and dynamics in contributing to language development in all children, but particularly DHH children, who are at a heightened risk for language delays.