Liver is one of the major sites of T4 metabolism. Several studies have reported low serum T3 concentrations and elevated reverse T3 (rT3) levels in hepatic cirrhosis. This study examined the influence of degree of the hepatocellular damage and the effect of improvement in clinical state on thyroid hormone concentrations in 44 cirrhotic patients. Low serum T4 and T3 as well as raised rT3 were observed in cirrhotic patients with advanced liver dysfunction alone. T3 resin uptake was increased in some of these patients suggesting decrease in serum thyroid-binding globulin concentration. In patients with histological changes but with normal liver function tests, serum T4, T3, and rT3 were not altered. Serum T3 and rT3 correlated significantly with liver function tests. T4, T3, and rT3 normalized on improvement in clinical status and liver function tests. Lowest levels of T4 and T3 with extremely high rT3 were seen in patients with extremely advanced liver dysfunction. In these patients, the mortality was high. Therefore, in hepatic cirrhosis, 1) T4 metabolism is altered with lowering of T4 and T3 and a rise in rT3. 2) These changes may be dependent on the degree of hepatocellular damage and reverse on improvement in liver function. 3) T4, T3, and rT3 levels are useful prognostic indices.