In response to Anastasi's (1958) long-standing challenge, the authors propose an empirically testable theoretical model that (a) goes beyond and qualifies the established behavioral genetics paradigm by allowing for nonadditive synergistic effects, direct measures of the environment, and mechanisms of organism-environment interaction, called proximal processes, through which genotypes are transformed into phenotypes; (b) hypothesizes that estimates of heritability (e.g., h2) increase markedly with the magnitude of proximal processes; (c) demonstrates that heritability measures the proportion of variation in individual differences attributable only to actualized genetic potential, with the degree of nonactualized potential remaining unknown; (d) proposes that, by enhancing proximal processes and environments, it is possible to increase the extent of actualized genetic potentials for developmental competence.