Most patients infected with hepatitis C virus (HCV) develop chronic hepatitis. Unfortunately, the pathological evolution of this disease over time is not completely understood. We studied 70 HCV‐positive patients, from whom 2 to 10 liver biopsy specimens (mean, 3.9) had been obtained during an interval of 1 to 26 years (mean, 8.8 years). Each biopsy specimen was evaluated independently by four pathologists who each provided a numerical score for the grade of portal/periportal necroinflammation (0‐4), grade of lobular necroinflammation (0‐4), their sum (final grade), and the stage of fibrosis (1‐4). The scores were correlated with progression of disease, if any, and transition to cirrhosis. During follow‐up, 35 patients (50%) developed cirrhosis. Cirrhosis developed in all patients with a high final grade (≥ 5) of necroinflammation on initial biopsy who were followed for 10 years and in 96% of patients with an intermediate final grade (3.5‐4.9) who were followed for 17 years. Only 30.4% of patients with low final grade (≤ 3.4) on initial biopsy developed cirrhosis after 13 years. All patients with evidence of septal fibrosis with incomplete nodularity (stage 3.0‐3.4) in the initial biopsy progressed to unequivocal cirrhosis by 10 years. The rate of progression to cirrhosis was accelerated in patients whose initial biopsies showed high‐grade and ‐stage lesions. This study demonstrates the importance of grading and staging liver biopsy lesions in chronic hepatitis C, particularly for patients with high‐grade necroinflammation, septal fibrosis, and regions of modularity on initial biopsy who are at high risk of developing advanced cirrhosis in the ensuing decade.