A new generalization of Onsager's theory of irreversible processes is presented. The main purpose is to allow for memory effects or causal time behavior, so that the response to a thermodynamic force comes later than the application of the force. This is accomplished by a statistical mechanical derivation of an exact non-Markoffian kinetic equation for the probability distribution in the space of macroscopic state variables. The memory effect in the resulting transport equations is represented by a time convolution of the thermodynamic forces with memory functions. The latter are time-correlation functions in the rates of change of the phase functions corresponding to macroscopic quantities. The resulting transport equations are not restricted to small deviations from thermal equilibrium. Onsager's theory is shown to be the low-frequency limit of our causal theory.