Steroids are a mainstay in liver transplantation for induction and maintenance immunosuppression but are associated with significant adverse effects. While prior studies have successfully limited the use of steroids, whether complete steroid avoidance will improve outcomes remains unclear. To further evaluate the need for steroids, consenting patients who underwent liver transplantation between June 2002 and May 2004 were entered into a prospective, randomized trial to receive either standard therapy (tacrolimus, mycophenolate mofetil, steroid induction/maintenance) or complete steroid avoidance (standard therapy without steroid induction/maintenance). Clinically suspected rejection was confirmed by biopsy and treated with pulse steroid therapy. Outcomes were compared on an intention to treat basis. Of the 72 patients enrolled, 36 (50%) were randomized to the steroid avoidance group with a mean follow up of 412 +/- 41 days. Donor and recipient characteristics were similar between groups. The steroid avoidance group was more likely to have significant infections (52% vs 28%, P = .03). There was a trend toward an increased rate of acute rejection (25% vs 14%, P = .23). Twelve of 36 recipients (33%) enrolled in the steroid avoidance group later received steroids. The incidence of recurrent hepatitis C was similar between groups. The 1-year patient (90% vs 83%, P = .44) and graft survivals (90% vs 81%, P = .27) were similar between groups. These data suggest complete steroid avoidance in liver transplantation results in acceptable patient and graft survival. However, the potential long-term benefits of steroid avoidance, including a decrease in severity of recurrent hepatitis C, remain under investigation.