This study examines how firm performance is impacted by family ownership and governance in an emerging market. Employing a panel data set of listed companies from National Stock Exchange (NSE) of India for the period 2011–2017, this study analyses the relationship between family ownership and firm performance while controlling for variables like impact of external environment and characteristics of firms. The performance of firms is measured by accounting measures of performance and Tobin’s Q. The findings of this study suggest that family ownership and firm performance have a nonlinear relationship and family ownership has a positive impact on firm performance till a certain point and after that it starts affecting firm performance negatively. This study also finds that family involvement in governance positively affects the firm performance.