Recurrent hepatitis C (RHCV) after liver transplantation is almost universal, and occasional patients will have an aggressive course characterized histologically by pericellular/sinusoidal fibrosis and cholestasis, known as fibrosing cholestatic hepatitis (FCH). The early stages and evolution of this disease have not been well characterized. A total of 77 liver biopsies performed for indication (nonprotocol) were evaluated for necroinflammation, rejection, cholestasis, and fibrosis. Control groups were composed of protocol biopsies from HCV transplant patients (10 biopsies) as well as non-HCV transplant patients (6 biopsies). Scoring for necroinflammation, rejection, and fibrosis were compiled using standard criteria (hepatic activity index, Banff, Ishak, METAVIR). Pericellular fibrosis was staged with a novel "sinusoidal" system. A cholestasis scoring system was developed to quantitate parenchymal and portal features of cholestasis. Biopsies were categorized as rejection, RHCV, FCH, and stable based on histology and clinical information. FCH was found to have a higher fibrosis stage overall when compared to most diagnostic groups, regardless of the staging system used. Additionally, sinusoidal fibrosis was significantly higher in the FCH diagnosis group. Cholestasis was more prominent in biopsies of FCH in all comparisons. In conclusion, the presence of cholestasis and fibrosis with mild to moderate RHCV should raise the suspicion of FCH. When studying the evolution of these cases, the first abnormality to appear is RHCV and cholestasis, fibrosis develops soon after, and both continue to worsen until the point of allograft failure or patient death.