Frozen section examination was performed on 385 donor livers before transplantation. Exclusion criteria were applied to the donor livers examined to exclude potentially dysfunctional livers. The exclusion criteria included the following: severe macrovesicular steatosis, ischemic necrosis, prominent chronic portal inflammation, prominent periductular fibrosis, granulomatous inflammation, bridging fibrosis, and malignancy. Twenty-seven of the 385 donor livers examined were excluded before transplantation. The following histologic features were present in the excluded livers: severe steatosis (22), ischemic necrosis (2), portal inflammation (1), and periductular fibrosis (2). Steatosis was present in 51 of the 385 (13.25%) organs examined, including 22 of the donor organs excluded before transplantation. Twenty-nine livers with mild to moderate steatosis were implanted into size and blood type-matched recipients. Indicators of allograft function (prothrombin time and bilirubin) and damage (aspartate aminotransferase and alanine aminotransferase) were measured daily for the first 10 days after transplant. There was no statistically significant difference between the group of nonfat livers and donor livers containing mild steatosis. Statistically significant higher posttransplant serum alanine aminotransferase and prothrombin time levels were present in the patients with livers implanted with mild versus moderate steatosis. The 1-year survival rate for patients receiving fatty versus nonfatty donor livers was not statistically different (Kaplan-Meier, P = 0.592). No significant differences were found in the clinical and laboratory characteristics of donors whose organs were implanted compared with the clinical and laboratory characteristics of donors whose organs were excluded. The primary nonfunction rate after applying the exclusion criteria was 1.4%, which is a significant decrease compared with our primary nonfunction rate of 8.5% before using frozen section examination. Frozen section examination is useful in excluding donor organs which may become dysfunctional after transplantation.