Right hemidiaphragm paralysis has been previously documented in patients after orthotopic liver transplantation (OLT) and it may contribute to the development of postoperative pulmonary problems. It has been postulated that a crush injury to the right phrenic nerve during OLT is the cause of dysfunction of the right hemidiaphragm. To assess the incidence and effect of right phrenic nerve injury after OLT, we prospectively studied 48 adult liver recipients. Twelve patients who underwent liver resection (LR), in whom the suprahepatic vena cava was not clamped, were used as a comparison group. Diaphragm excursion by ultrasound and pulmonary function were performed preoperatively and postoperatively; transcutaneous phrenic nerve conduction studies were performed postoperatively. Right phrenic nerve injury and hemidiaphragm paralysis occurred in 79% and 38% of the liver recipients but not after LR. Conduction along the right phrenic nerve was absent in 53% and reduced in another 26%. Left phrenic nerve conduction and left hemidiaphragm excursion were normal in both liver recipients and the patients who had LR. Liver recipients with no conduction in the right phrenic nerve had a significantly greater decrease in vital capacity in the supine position (29±9.8%) compared with those with some conduction (14±6.9%, P<0.001). However, neither the time on the ventilator nor the hospital stay was significantly different in the latter two groups. Complete recovery of phrenic nerve conduction and diaphragm function took until nine months in some patients. Right phrenic nerve injury is common after OLT and it is the cause of right hemidiaphragm dysfunction.