Five cases of subcapsular liver necrosis were found in a series of 55 hepatic orthotopic allografts examined at hepatectomy or autopsy during a 3-yr period at Children's Hospital of Pittsburgh. There was a pronounced rise in liver enzymes in the first few days in all of the cases after transplantation followed by a decrease in values in four of the cases over the next few days. All were characterized by an irregular subcapsular band of necrotic tissue involving both lobes, to a variable degree, but most frequently the right lobe. There were no obstructions or occlusions of the extrahepatic arteries, portal or hepatic veins. Hepatocyte necrosis was frequently observed in periportal areas, although centrilobular necrosis was also common. Varying degrees of steatosis were seen in the rest of the liver. Various etiological possibilities are discussed, particularly the role of hypoperfusion. Focal subcapsular necrosis of liver allografts may be more frequent than is presently realized. Awareness that hepatic necrosis in allografts may occur as localized subcapsular phenomenon may prevent misinterpretation of superficial biopsy findings as being representative of the entire organ, thus overestimating the degree of damage.