To investigate the natural history of compensated cirrhosis, 293 consecutive patients without previous major complications (ascites, jaundice, encephalopathy or gastrointestinal hemorrhage) were studied in terms of morbidity (probability of developing decompensated cirrhosis during follow-up) and survival. Patients were diagnosed by liver histology between 1968 and 1980. Median follow-up was 63 months. Decompensation of cirrhosis was considered when a patient first developed one of the major complications of the disease. Ten years after diagnosis, the probability of developing decompensated cirrhosis and the survival probability rate were 58 and 47%, respectively. A multivariate survival analysis (Cox's regression model) using clinical, biochemical and histological data obtained at diagnosis disclosed seven factors that predicted prognosis: serum bilirubin; serum y-globulin concentration; hepatic stigmata; prothrombin time; sex; age, and alkaline phosphatase. According to the contribution of each one of these factors to the final model, a prognostic index was constructed that allows calculation of the estimated survival probability. The predicting value of this index was validated by a split sample testing technique.