Recurrent infection with hepatitis C virus (HCV) is almost universal following orthotopic liver transplantation although clinical severity varies. Data on 135 patients who underwent transplantation for hepatitis C cirrhosis were reviewed. We describe a progressive, severe cholestatic form of hepatitis occurring in a subgroup of patients with recurrent hepatitis C. Ten patients with severe recurrent hepatitis C were identified; 1 has died, 1 awaits retransplantation, and 8 have undergone retransplantation. All 10 developed severe progressive cholestatic hepatitis, with a mean rise in bilirubin to 24.7 mg/dL at the time of retransplantation. Histology at initial recurrence was of mild hepatitis without evidence of rejection. The failed grafts showed either cirrhosis or confluent hepatic necrosis. The onset of cholestasis preceded retransplantation by less than 5 months. Our study suggests that a minority of patients with recurrent hepatitis C after undergoing liver transplantation develop a severe progressive cholestatic hepatitis and liver failure.