In 93 consecutive cases of orthotopic liver transplantation, there were 24 examples of biliary obstruction and 8 of bile fistula formation. Six of the obstructed livers developed biliary cast formation so extensive that the smaller intrahepatic ducts became plugged to an extent that they could no longer be treated by surgical means. In each of the 6 cases, the most important causative factor was neglected obstruction of the large bile ducts with the intrahepatic lesions apparently being late and secondary. Stone and/or cast formation also occurred in other obstructed livers in the presence of bile fistulas, but these deposits were limited to the large ducts where they could be removed. Although homograft bile undoubtedly has increased lithogenicity at certain postoperative times, the data show that biliary sludge formation essentially is always associated with defective bile duct reconstruction, and the observations underscored the urgency with which reoperation must be considered. Techniques of secondary intervention were described, with emphasis on conversion of cholecystojejunostomy to choledochojejunostomy. This operation has permitted salvage of homografts in 8 of 9 trials and the survival of 7 patients.