Regeneration is crucial for the recovery of hepatic mass following liver transplantation. Glucocorticoids, immunosuppressive and antiinflammatory agents commonly used in transplantation, are known to inhibit the expression of specific cytokines and growth factors. Some of these proteins, namely tumor necrosis factor α (TNF-α) and interleukin 6 (IL-6), play a critical role in the initiation of liver regeneration. Following cold preservation and reperfusion of the transplanted liver, the normal recovery process is marked by increased expression of TNF-α and IL-6, followed by activation of cytokine-responsive transcription factors and progression of the cell cycle resulting in hepatocyte proliferation. We hypothesized that glucocorticoids may influence the repair mechanisms initiated after extended cold preservation and transplantation. Using a rat orthotopic liver transplant model, recipient animals were treated with dexamethasone at the time of transplantation of liver grafts with prolonged cold storage (16 hours). Treatment with dexamethasone suppressed and delayed the expression of TNF-α and IL-6 compared with animals receiving no treatment and attenuated downstream nuclear factor κB (NF-κB), signal transduction and activator of transcription 3 (STAT3), and activation protein 1 (AP-1) activation. This suppression was accompanied by poor cell-cycle progression, delayed cyclin D1 nuclear transposition, and impaired hepatocyte proliferation by BrdU uptake. Histologically, the liver grafts in treated animals demonstrated more injury than controls, which appeared to be necrosis, rather than apoptosis. In conclusion, these data provide evidence that the administration of glucocorticoids at the time of transplantation inhibits the initiation of the regenerative process and may have a deleterious effect on the recovery of liver grafts requiring significant regeneration. This may be particularly relevant for transplantation of partial liver grafts in the living donor setting.