Liver disease in children with alpha1-antitrypsin deficiency and protease inhibitor type ZZ does not necessarily carry a bad prognosis. Fourteen of our 18 patients presented with the neonatal hepatitis syndrome and four had hepatomegaly without jaundice. Although four patients have died of cirrhosis and its complications, and three have severe liver disease, most of the 11 others, of whom four are over 13 years of age, have relatively little clinical, biochemical, or histologic evidence of liver disease. Persistent elevation of SGOT during the third year of life and renal or pulmonary problems were associated with a poor prognosis. Liver biopsy early in the course of the disease was not helpful prognostically but was useful in assessment of the severity of liver disease and demonstration of alpha1AT storage, alpha1AT deficiency was found in 29% of our patients who presented with the neonatal hepatitis syndrome. One of seven apparently healthy Pi type ZZ sibs of our patients had significant liver disease which had not been suspected previously.