Leo Penn(director)/Eileen Ryan(actress) —> Sean Penn —> Michael Penn —> Christopher Penn
Naomi/Wynona Judd —> Ashley Judd
Ellen DeGeneres —> Vance DeGeneres (writer/correspondent on The Daily Show)
Tommy Chong —> Rae Dawn Chong
Margeaux Hemingway —> Mariel Hemingway
Randy Quaid —> Dennis Quaid
John Phillips —> MacKenzie Phillips
Ryan O’Neal —> Tatum O’Neal
Helen Hunt – (Father and Uncle are directors)
Robert Downey —> Robert Downey, Jr.
Oh, I see how it is spoke, you can break the rules, huh? Hmmmmph. 
I am not deliciously saucy.
Ralph Fiennes and Joseph Fiennes (already listed) => Sophie Fiennes
Oscar Beregi Sr (Great character actor in Europe) and Oscar Beregi Jr (Great “menacing European-bad-guy-at-large” in US and TZ veteran).
Surprised nobody has mentioned this one: Francis Coppola => Talia Shire
psycat: I make 'em, I can break 'em. 
(I had thought of a whole bunch, and was gonna insert 'em one at a time, but it was looking like the thread was dying, so I just went ahead and listed 'em all.)
How about the sister acts?
Rosie and Jenny Dolly!
Rosetta and Vivian Duncan!
Daisy and Violet Hilton!
May and Flo Irwin!
The incomparable Cherry Sisters!
Zsa Zsa Gabor —> Eva Gabor
Actually, Blythe Danner is the mother of Gwyneth Paltrow.
Laura Dern’s mother is Diane Ladd.
Shadowfox
“The dead have risen, and they’re voting Republican!” - Bart Simpson
Hey, check this out:
Tennessee Williams(cousin) --> Diane Ladd(actress) --> Laura Dern
Frank Zappa --> Moon Unit Zappa --> Dweezil Zappa
–In France I’m considered a genius.
James Arness => Peter Graves
Those Thom kids (2 of them on soap Y&R, the other was on The Nanny
Gary Busey => Jake Busey
Henry Fonda => Jane Fonda => Peter Fonda => Bridget Fonda
Interesting topic, but did you notice how many seond generation persons listed have received major awards, or at least nominations (Myra Sorvino, Angelina Jolie, Helen Hunt, Jane Fonda, Peter Fonda)?
“My, my. Such a lot of guns around here and so few brains.”
~Humphrey Bogart
Laura Dern’s mother is Diane Ladd.
oops. missed the end of the 2nd page.
repeat.
There have been a lot of posts here pointing out Hollywood folks who are related to each other, but not all of these relationships are nepotistic. (Is that a word??)
What is nepotism? According to my Webster’s, nepotism is “favoritism shown to relatives, esp. in appointment to desirable positions.”
Therefore, one relative would have to be in a position to exercise influence in getting the other a job–or at least an audition.
The case of Aaron Spelling and Tori Spelling is an obvious example of nepotism. She got the job on 90210 because he was her dad.
Francis Ford Coppola and Nicolas Cage are an example of a far more subtle kind of nepotism. I don’t know of any example of Coppola directly getting Cage a job. And I believe that Cage became a big star on his own merits–he is a good actor, after all. Cage’s real last name is actually Coppola, and he changed it in order to distance himself from Coppola. But, we would be foolish to believe that Cage was not helped by his relationship to Coppola. If nothing else, I am sure the casting agents were happy to let him audition. Did Coppola necessarily encourage this? Who knows? But you can bet that the casting agents would not risk pissing Coppola off by not even seeing his nephew. An equally good actor might not have even been able to get his foot in the door.
Now, I don’t know enough about the workings of Hollywood to know which relationships were NOT nepotistic, but I suspect some of them were not.
An example: IIRC, Zsa Zsa and Eva (and let’s not forget Magda) Gabor were pushed into the biz by their mother. So did Zsa Zsa get Eva a job or did they both get jobs because of their mother?
And because this post is way too serious for this thread, I offer this nepotistic relationship:
The Donald —> Ivana
It is not Hollywood, but the Trumps are always good for a laugh.
Timothy Leary —> Goddaughter : Winona Ryder
~handcrafted signatures since 1975~
Maureen Sullavan --> Mia Farrow
“Um, according to who? Nothing more than a high brow troll, though occasionally the bi polar personality swung in a constructive direction on innocuous topics.” Omniscient
In keeping with Green Bean’s clarification about nepotism, we can add Martin Sheen and Charlie Sheen. Charlie has said that he took his dad’s stage name (instead of his real last name like Emilio and Renee) so he could get his foot in the door.
I always try to do things in chronological order.