The liver biopsy has long been the gold standard for the evaluation of the state of liver disease in patients with chronic hepatitis C. Although a liver biopsy continues to be a recommended part of the work-up of this disease, its routine use is challenged by the increasing effectiveness of therapy and by surrogate biochemical tests that give information about the stage of disease. Nevertheless, recent studies have shown that histological features other than stage may have predictive value for disease progression and therapeutic response to interferon-based regimens. Pathologists can increase the relevance and utility of the liver biopsy in chronic hepatitis C by the systematic reporting of steatosis and iron accumulation in addition to stage and grade, and by identifying certain potential confounding liver diseases, such as steatohepatitis and hereditary hemochromatosis. Clinicians can then make best use of the information derived from the liver biopsy to help them advise patients on the natural history of their disease and the therapeutic options that are available.