Steatosis of the donor liver is known to impact on patient and allograft outcome after orthotopic liver transplantation (OLT). The aim of this study is to evaluate the effect of increasing grades of cadaveric donor liver steatosis on recipient outcome. Between January, 1986 and December, 2000, 120 OLTs were performed with 72 mild, 25 moderate, and 23 severe steatotic donor livers. Donors of steatotic livers were more likely to be older (P = .001) and have died of intracerebral haemorrhage than donors of nonsteatotic livers. Initial poor graft function (IPF) was more common in donor livers with either moderate or severe steatosis than in donor livers with mild steatosis (P = .03). Primary graft nonfunction (PNF) occurred in only 1 donor liver with severe steatosis. PGE1 (PGE1) usage was higher in recipients of donor livers with moderate or severe steatosis versus donor livers with mild steatosis (P = .001). Allograft loss was greater at 1 year both in the moderate and severe (P = .03) steatotic liver groups. Patient survival at 3 months and overall allograft survival both were impacted negatively by increasing grades of donor liver steatosis (P = .02, P = .03). Three-month allograft survival was reduced in the steatotic donor livers if the donor was 50+ years old (P = .033). Recipient status at OLT (P = .001) and donor steatosis (P = .046) impacted on 30 day allograft survival (multivariate analysis). In conclusion, increasing grades of donor liver steatosis were associated with worse IPF and increased PGE1 usage. There was a negative impact of steatosis on both recipient and early allograft survival.