Criteria for histologic diagnosis of chronic rejection (CR) are based on changes seen late in the disease process that are likely to be irreversible and unresponsive to treatment. Changes occurring during the evolution of CR are less clearly defined. The serial biopsy specimens, failed allografts, and biochemical profiles of 28 patients who underwent retransplantation for CR were examined with the aim of identifying histologic and biochemical features that were present during the early stages of CR. For each case, a point of acute deterioration in liver function tests (LFTs) was identified ("start time" [ST]) that subsequently progressed to graft failure. Biopsy specimens before, at the time of ("start biopsy" [SB]), and after the ST were assessed histologically, and findings were correlated with the biochemical changes. CR resulted from acute rejection (AR) that did not resolve. Centrilobular necroinflammation (CLNI) associated with an elevated aspartate transaminase (AST) level and portal tract features of AR were present at the start. Portal AR features resolved, CLNI persisted, AST level remained elevated, and bilirubin and alkaline phosphatase levels progressively increased throughout the evolution of CR. Portal tracts also showed a loss of small arterial and bile duct branches, with arterial loss occurring early and bile duct loss as a later progressive lesion. Foam cell arteriopathy was rarely seen in needle biopsy specimens. In conclusion, findings from this study may help identify patients at risk of progressing to graft loss from CR at a stage when the disease process is potentially reversible and amenable to treatment.