We postulated that three tests could be used to advantage in the prognosis of patients with alcoholic liver disease. Ninety-eight patients who entered the hospital in hepatic failure, and who survived that illness, were observed for an average of 3.5 years after discharge. At the time of entry, most had jaundice, ascites, edema, and hepatosplenomegaly. Biopsy of the liver disclosed both cirrhosis and hepatitis in 75-80%. Neither clinical features nor laboratory tests could differentiate these patients at the time of entry. However, as early as 3 months after hospitalization, the clinical course and laboratory tests served to distinguish two groups: group 1 comprised 46 patients in whom the serum bilirubin was less than 2 mg/dl; the aspartate aminotransferase less than 55 mU/ml; and the alkaline phosphatase less than 125 mU/ml. In 40 (87%) of these 46 patients, clinical findings improved concomitantly with laboratory tests. Group 2 comprised 52 patients in whom one or more of these three tests showed persistent abnormality; only 12 (23%) of the 52 patients in this group improved clinically and three subsequently died. Although the majority of patients (76%) in group 1 reported abstinence on follow-up, 44% of group 2 patients also claimed abstinence. Complications of liver disease, shunt surgery, and continuing alcoholism contributed to liver failure. Early identification of such patients should aid in the management of alcoholic liver disease.