A subset of hepatitis C virus (HCV)-positive liver transplant recipients develop cholestatic hepatitis (CH). We investigated the role of pretransplantation disease activity (estimated by Knodell score and HCV RNA quantitation) in the native liver explant on the development of CH and graft and patient outcome. Eight patients with CH were identified among HCV-positive liver transplants and were compared with 20 consecutive patients with recurrent HCV hepatitis of noncholestatic type in liver transplants. We evaluated all 28 explanted native livers histologically using the Knodell scoring system. HCV viral load was measured in the native explant and 5 allograft explants from the CH group using Amplicor HCV RNA Monitor test. Six of 8 patients with CH had HCV RNA levels of 5,000 copies/μg of DNA or greater in the native liver explant, whereas only 1 of the control group had viral loads greater than this level. Greater HCV RNA levels correlated with worse graft and patient survival (P < .001). The 3-year survival rate in the CH group was 18% compared with 77% in the control group (P < .001). There was no difference in the primary immunosuppressive regimens used in the 2 groups. We conclude that (1) CH has a uniformly poor prognosis, (2) type of immunosuppressive therapy appears to have little influence on the development of CH, (3) high pretransplantation HCV RNA levels in the native explant may predict the development of CH, and (4) patients with high HCV RNA levels in the explanted native liver may be appropriate candidates for antiviral therapy to prevent the development of CH.