To determine the frequency and prognosis of histologic cirrhosis developing during or after corticosteroid therapy of hepatitis B surface antigen-negative chronic active hepatitis, we followed 83 patients for 90 +/- 5 mo after administration of corticosteroids. Thirty-three patients satisfied histologic criteria for cirrhosis after 30 +/- 5 mo. In 25 patients, cirrhosis developed during treatment; in 8 patients, cirrhosis eventuated after remission and cessation of therapy. The probability of developing histologic findings of cirrhosis was 59% if remission had not been achieved after 3 yr of continuous therapy. Longer requirements for treatment and deterioration during therapy characterized these patients. Once remission was achieved, the mean annual incidence of cirrhosis was only 2.6%. Patients who manifested evidence of cirrhosis in their biopsy specimens could not be distinguished by initial clinical, biochemical, or histologic findings. Ascites, encephalopathy, and esophageal varices developed infrequently; 5-yr survival after documentation of cirrhosis was 93%. We conclude that histologic features of cirrhosis develop commonly during therapy, especially if remission is not achieved quickly. After remission, cirrhosis develops infrequently. The development of histologic cirrhosis does not influence immediate morbidity and 5-yr life expectancy.