We report a prospective clinical and virological study of 18 patients undergoing orthotopic liver transplantation, selected because of hepatitis C virus (HCV) RNA positivity before transplantation. Nine of the 18 patients (50%) developed chronic active hepatitis (CAH) in liver allografts during the first year posttransplantation; hepatitis was first observed between 6 and 25 weeks posttransplantation. HCV viremia was measured for all patients before transplantation and on posttransplantation days 3, 7, and 14, and months 1, 6, 12, and 24 to 41, by quantitative competitive RNA polymerase chain reaction (QC-PCR). HCV RNA levels on posttransplantation days 3, 7, and 14 were significantly higher among patients who subsequently developed CAH versus those who did not (P < .02 by t-test and Mann-Whitney test on all three dates). However, HCV RNA levels in sera obtained at 1, 6, and 12 months posttransplantation did not correlate with CAH at 1 year or with HCV genotype determined in posttransplantation sera. At least two serial liver biopsy specimens from each patient were stained for HCV nonstructural 4 (NS4) antigen by immunohistochemistry. The intensity of cytoplasmic staining of NS4 antigen was significantly higher for specimens with CAH versus those without CAH (P = .028 by chi 2). Three patients developed bridging fibrosis in liver allografts during the first year after transplantation; all three patients had intense (3+) immunostaining for NS4 antigen, and the infecting genotypes were 1a, 1b, and 1a plus 1b, respectively. In summary, the 18 patients all developed high-titer viremia by 1 month after liver transplantation, whereas CAH developed in 50% of allografts during the first year after transplantation.(ABSTRACT TRUNCATED AT 250 WORDS)