While questions such as this were once largely unknowable, science has advanced far enough now that we can answer it with a reasonable degree of certainty.
Certain characteristics and traits are more influenced by heredity or biology than by environment. These include physical characteristics (such as height, weight, dental health, and age of death), intellectual ability (such as memory and language acquisition), and emotional characteristics (such as personality, alcohol dependence, and neuroses). Obviously these characteristics are not all completely driven by biology and will vary from one individual to another.
All of these characteristics can influence a person's psychological development. Being too tall too early, for example, has an impact on a child; not speaking until later than most children can also influence how a child sees himself in relation to others. (However, put that same child in a different environment, one in which every student is tall, and the impact of his height is mitigated.)
Scientists have discovered that some biological factors can be altered by environment; for example, animals have adapted physically to their environments. It is also true that biological factors can impact environment; for example, someone with a volatile temperament (primarily determined by biology) can create for himself a different environment than someone in the same setting who has a more pleasant and approachable temperament.
Environmental factors which can influence psychological development include nurture, stimulation, nutrition, and socioeconomic status. All of these factors help determine how a child acts and reacts as he develops over time. These factors also shape how a child envisions his future and how he relates to others around him.
Heredity and environment are, in many ways, interconnected, which is why scientists and psychologists are still interested in studying this issue.