This study examined the effect of preconditioning on steatotic livers for transplantation and attempted to identify the underlying protective mechanisms. Blood flow alterations, neutrophil accumulation, tumor necrosis factor α release and lipid peroxidation were observed in nonsteatotic livers after transplantation. Steatotic and nonsteatotic liver grafts were similar in their blood flow, neutrophil accumulation, and TNF release after transplantation. However, in the presence of steatosis, lipid peroxidation and hepatic injury increased. In addition, recipients of steatotic liver grafts were more vulnerable to lung damage associated with transplantation. The conversion of xanthine dehydrogenase to xanthine oxidase and the accumulation of xanthine during cold ischemia was greater in steatotic than in nonsteatotic liver grafts. The results obtained with xanthine oxidase inhibitors indicated that xanthine/xanthine oxidase could be responsible for the increased lipid peroxidation as well as the exacerbated liver and lung damage associated with transplantation of steatotic livers. Preconditioning reduced the xanthine accumulation and percentage of xanthine oxidase seen in steatotic liver grafts during cold ischemia, and conferred protection against liver and lung damage following transplantation. The benefits of preconditioning could be mediated by nitric oxide. These findings suggest that preconditioning could be a relevant new strategy to protect against the inherent risk of steatotic liver failure following transplantation.