In order to delineate the incidence, etiology, and impact of liver disease in renal transplant patients, we reviewed 405 consecutive transplants performed between 1970 and 1980. Hepatic dysfunction of at least 2 weeks' duration was diagnosed in 42 patients (10.4%). Of 28 patients acquiring hepatitis in the first post-transplant year, 26 (92.8%) developed chronic hepatitis; of 14 acquiring hepatitis after the first year, 9 (64.2%) developed chronic hepatitis. Of the 42 patients, 19 (45.2%) died, as compared with 16% of the nonhepatitis patients (P less than 0.001). Only one of these patients died of liver failure, with 15 of the 19 (78.9%) dying of extrahepatic infection. In addition, 12 of the 23 survivors (52.1%) suffered life-threatening infections from which they recovered, as compared with 20% of the nonhepatitis patients (P less than 0.01). Conversely, graft survival was significantly increased among the hepatitis patients (73% 1-year cadaveric allograft survival as compared with 50% for the nonhepatitis patients (P less than 0.01)). The etiology of the liver disease was identified in the minority of patients: 5 (11.9%) with hepatitis B, with none occurring since 1973; 10 (23.8%) with evidence of cytomegalovirus infection; and 1 (2.3%) with azathioprine toxicity. We conclude that the major cause of liver disease in renal transplant patients is non-A, non-B hepatitis, and furthermore, that this disease has a marked immunosuppressing effect resulting in increased allograft survival and a marked increase of life-threatening extrahepatic infection.