This study was undertaken to evaluate angiotensin converting enzyme activity in patients with liver disease, and to explore its relationship to thyroid function in patients with liver disease. Serum angiotensin converting enzyme activity and thyroid hormone levels, determined in 79 patients with intrahepatic-type liver disease and 18 patients with extrahepatic biliary obstruction, were compared with values in 129 euthyroid controls. Serum angiotensin converting enzyme activity was higher in intrahepatic disease than in extrahepatic obstruction, but statistically significant only for acute intrahepatic disease. In the patients studied, high serum angiotensin converting enzyme activity (22 units/ml or more) virtually excluded extrahepatic biliary obstruction, with a negative predictive value of 94 percent. Low serum angiotensin converting enzyme activity had a positive predictive value for extrahepatic obstruction of only 67 percent. Increased angiotensin converting enzyme activity could not be explained as a function of enhanced thyroid activity. Serum angiotensin converting enzyme activity may be useful in separating patients with intrahepatic liver disease from those with extrahepatic obstruction.