This paper discusses the expression of kinship in Paluai (Baluan-Pam, ISO 639-3: blq), an Oceanic language spoken on Baluan Island, Manus Province, Papua New Guinea. Based on data gathered during extensive fieldwork, the authors first consider the formal characteristics of nominal possessive constructions that are relevant to the kinship system. Subsequently, the set of consanguineal and affinal kinship terms is presented, followed by a detailed discussion of social organization on Baluan Island and the role of the kinship system therein, and how this may fit in with the different forms of nominal possession that various terms can take. All kin terms except four (pên 'daughter', pwai 'cousin', kauwat 'in-law', and polam 'inlaw') can only enter into direct possessive constructions. The final part of the paper is dedicated to the use of kinship terms in a changing cultural context, including the use of birth order terms, which are a relatively rare phenomenon, and the partial replacement of the system by terms from the creole language Tok Pisin.