Only a subset of hepatitis C virus (HCV)-infected patients develop progressive hepatic fibrosis after liver transplantation (LT). Hepatic stellate cell (HSC) activation is a pivotal step in hepatic fibrosis and precedes clinically apparent fibrosis. We determined whether early HSC activation, measured in 4-month protocol post-LT biopsies, is predictive of subsequent development of more histologically severe recurrence of HCV. Early (4 month) post-LT HSC activation, as measured by alpha-smooth muscle actin (alpha-SMA) staining, was determined in liver biopsies from recipients with severe (fibrosis score > or = 2, n = 13) and with mild (fibrosis score of 0, n = 13) recurrence of HCV at one-year post-LT. Immunohistochemical staining for alpha-smooth muscle actin (alpha-SMA) was used to generate HSC activation scores (regional and total). Total HSC activation scores at 4 months were similar in patients with severe and mild HCV recurrence (3.9 +/- 2.0 vs. 2.7 +/- 2.2, P = 0.2). Regional HSC activation, assessed as parenchymal (zones 1, 2, and 3) or mesenchymal (portal tracts and fibrous septa), was different between the study groups, with higher mesenchymal scores predictive of progression. No patients in the mild recurrence group had detectable mesenchymal alpha-SMA staining vs. 46% (6/13) of patients with severe recurrence (P < 0.01). Mesenchymal activation of HSC had a specificity and positive predictive value of 100% for development of progressive fibrosis in liver allografts of patients with hepatitis C. In conclusion, early activation of mesenchymal HSCs is a marker for progressive fibrosis in patients with hepatitis C post-LT and may help select patients who would benefit from HCV or HSC-targeted therapy.