To assess the prognosis of patients with severe chronic hepatitis after histologic examination had shown an improvement to chronic persistent hepatitis, we followed 52 such patients regularly for 54 +/- 4 months after the cessation of corticosteroid therapy. In 24 patients, the condition deteriorated 7 +/- 1 months after therapy and required further treatment with prednisone. Histologic features of chronic active hepatitis, including bridging and multilobular necrosis, were documented in all 14 patients in whom biopsies were performed. In 20 of 24 patients, the disease responded to retreatment, but 13 again had relapses, and cirrhosis developed in two. Of 28 patients who remained asymptomatic for 48 +/- 6 months, 17 retained features of chronic persistent hepatitis, and nine had improvement to normal histologic features. Cirrhosis developed in two patients without clinical manifestations of active inflammation. Findings before and after treatment did not predict outcome. We conclude that severe chronic active hepatitis that has been treated with prednisone and converted to chronic persistent hepatitis will often and unpredictably deteriorate after treatment has been stopped. Cirrhosis develops rarely but may occur with or without clinically overt chronic active hepatitis.