To assess the frequency and significance of complete resolution of inflammatory activity following corticosteroid therapy, 115 patients with severe HBsAg-negative chronic active hepatitis were followed regularly for 84 +/- 5 months. Of 83 patients eligible to revert to normal liver tissue, 18 did so after 56 +/- 8 months. Five of the 18 relapsed after treatment withdrawal. Only patients who improved spontaneously after cessation of treatment from histologic features of chronic persistent hepatitis to normal invariably sustained the improvement. Of 32 patients with cirrhosis at presentation, 17 reverted to inactive cirrhosis after 48 +/- 10 months, but only 3 remained inactive after discontinuation of treatment. Mortality was similar in patients with and without reversion to normal tissue (0 vs. 14%, p greater than 0.2), but the frequency of relapse was less after complete resolution (28 vs. 76%, p less than 0.001). Reversion to inactive cirrhosis did not improve survival or reduce relapse frequency after remission and treatment withdrawal. Findings prior to therapy did not predict outcome. We conclude that complete resolution of inflammatory activity is possible, but that it occurs slowly, infrequently and unpredictably after therapy. In patients without cirrhosis, reversion to normal liver tissue decreases the likelihood of relapse and the requirement for retreatment. In patients with cirrhosis at presentation, elimination of inflammatory activity is rarely sustained and does not improve prognosis after remission and treatment withdrawal.