A medical technology assessment of the liver transplantation programme of Groningen University Hospital, which was commissioned by the Dutch National Health Insurance Board, is discussed. The results of all 152 liver transplantations performed between 1979 and November 1990 were analysed. The main objective of the study was to evaluate the long-term effects of liver transplantation. Five years after transplantation 59% of the adult patients were still alive. The survival probability depended greatly on the primary liver disease. Mortality and morbidity occurred mainly within the first year after transplantation. Thereafter the prospects for the patients were excellent, with regard to both the probability of survival and the quality of life. The costs of liver transplantation could be calculated only for patients with primary biliary cirrhosis and other forms of biliary cirrhosis, not caused by hepatitis B infection or alcohol abuse. For these patients the costs of a liver transplantation were estimated at HFl. 263,000--(with a 10% margin), 10 years of follow-up included and corrected for the costs that would have been made for the treatment of the liver disease. For this population of patients a liver transplantation costs between Hfl. 64,000--and Hfl. 79,000--per life year gained, 10 years of follow-up included. Costs of cyclosporin still take up a major part of the costs. The need for liver transplantation in the Netherlands was estimated at between 35 and 126 transplantations per year, depending on indications, contraindications, referral policy and the percentage of retransplantations.