Nodular transformation, a rare hyperplastic condition of the liver, has been reported in patients with rheumatoid arthritis, Felty's syndrome, the CRST syndrome, and myeloproliferative disorders. Associated disorders in the present clinicopathologic study of 30 cases included the foregoing as well as extrahepatic neoplasms, endocrine disorders, and other diseases producing immune dysfunction; some patients had received drug therapy for a prolonged time. Clinically nodular transformation may be confused with cirrhosis; histologic evaluation of liver biopsy material is essential for diagnosis. Complications include portal hypertension, hepatic failure, and rupture of the liver. Histologic and experimental evidence suggests that nodular transformation is preneoplastic, possibly giving rise to hepatocellular adenomas or carcinomas. Experimental and clinical data suggest that drugs should be considered as possible etiologic factors in the development of the nodules.