Chronic rejection (CR) after liver transplantation is thought to be a dynamic and potentially reversible process. The Banff working group has developed recommendations for its histopathologic staging. The 1999 Banff classification of CR (i.e., bile duct dystrophy >50% and/or bile duct loss >20%) was applied to: 1) biopsies from patients retransplanted for CR (N = 19) and pathologies other than CR (N = 21) to evaluate its specificity and sensitivity, especially of the early stage lesions of CR; and 2) biopsies from nonretransplanted patients (N = 21) to evaluate the evolution of CR lesions. Atypical forms of CR were also described. Including an early stage into the definition of CR has resulted in a much higher sensitivity for its diagnosis, as compared with the former classification (i.e., bile duct loss >50%) (89% vs. 33%; P =.0001), while keeping an acceptable specificity (74% vs. 100%; P =.03). In 55% of the nonretransplanted patients, CR lesions were reversible. No histologic feature reliably predicted CR outcome. Transient lobular hepatitis, unrelated to viral infection, and veno-occlusive disease were seen significantly more often in the CR group (P =.04 and P =.03, respectively). We conclude that the application of the 1999 Banff classification is superior to the previous classification for the diagnosis of CR. However, limited information can be drawn regarding the outcome of CR based on histology alone. Transient lobular hepatitis, unrelated to viral infection and veno-occlusive disease, may be an unusual expression of CR.