To identify prognostic features and to define the role of liver transplantation in severe autoimmune chronic active hepatitis, findings before and after corticosteroid therapy in 111 patients were correlated with outcome and compared with the findings in 24 patients who had been selected independently for liver transplantation. Patients whose condition deteriorated during corticosteroid treatment were younger (32 +/- 3 yr vs. 43 +/- 2 yr; p less than 0.02) than those who experienced remission, but no individual features predicted outcome. Patients in whom therapy failed required longer durations of continuous treatment than did those who experienced remission (60 +/- 14 mo vs. 20 +/- 12 mo; p = 0.001). Of 13 patients who did not experience remission within 4 yr, 9 (69%) ultimately deteriorated. Ascites developed more often in those patients whose therapy failed and who died of liver failure than in counterparts who survived (86% vs. 33%). Patients undergoing transplantation were similar to those whose treatment failed, but they died less frequently (8% vs. 56%, p less than 0.01). Indeed, the 5-yr survival rate after transplantation was comparable to that of patients who had entered remission (92% vs. 100%). Successive biopsy samples failed to disclose recurrent autoimmune hepatitis after transplantation. Human leukocyte antigens A1, B8 occurred more commonly in patients in whom treatment failed or who underwent transplantation (70% vs. 41%, p less than 0.05). We conclude that failure to achieve remission within 4 yr and the human leukocyte antigen A1, B8 phenotype are associated with poor prognosis. Manifestations of liver decompensation, such as ascites, in patients who have been unable to experience remission justify consideration of transplantation.(ABSTRACT TRUNCATED AT 250 WORDS)