Twenty alcoholic patients underwent sequential biopsy of the liver as part of their medical evaluation. Of the 10 patients with simple fatty liver, 9 showed no progression of the histologic lesion after 1-2 yr. By contrast, of 10 patients with perivenular fibrosis, of the 9 who continued to drink all showed progression. Laboratory parameters did not distinguish between these two groups at the time of initial biopsy. The ultrastructure of the perivenular lesion was evaluated in 11 patients. The thickness of the perivenular rim was variable, but there was a good correlation between the thickness of the perivenular rim and the number of mesenchymal cells surrounding the venules (correlation coefficient r = 0.7634, p less than 0.001). Myofibroblasts represented the most common cell type but there was also infiltration with other mononuclear cells. Collagen fibers surrounding myofibroblasts were observed in the perivenular fibrotic area. Thus, in the group of alcoholics who were investigated in this study, myofibroblast proliferation and collagen deposition around the terminal hepatic venule represent the first apparent lesions in the sequence of events leading to alcoholic cirrhosis.