We present a new phylogenetic comparative method—phylogenetic analysis of covariance (PANCOVA)—that uses interspecific data and a phylogeny to estimate the effects of major events on both the rate of phenotypic evolution and the association between traits. It could be used, for example, to model the impact of a key innovation, colonization of a new habitat, or environmental change. The approach is optimized with maximum likelihood and is formulated under the familiar phylogenetic generalized least squares framework, which is flexible and easily extended to incorporate other factors and parameters. As an example, we explore the relationship between parental investment and relative telencephalon size in birds and contrast the results of PANCOVA with those from other phylogenetic comparative methods.