We examine the effectiveness of shareholder activism when firms have controlling family owners. Activists are less likely to target family firms than nonfamily firms, and campaigns targeting family firms exhibit heightened hostility between activists and targets and have lower success rates. These campaigns, however, are associated with higher short- and long-term value gains, more favorable analyst forecasts, and greater media coverage. Value gains are higher, particularly when activists attempt to reduce powerful families’ influence and overhaul firms’ inefficient operations. Campaigns launched against family firms also create greater positive value externalities on their industry peers, especially on family firms.