Inflammatory Bowel Diseases® 3(4):288-302 © 1997 Crohn's & Colitis Foundation of America, Inc. Persistent hepatobiliary dysfunction is seen in 5-15% of all patients with IBD. The most important form of liver disease is PSC, a chronic progressive cholestatic liver disease characterized by inflammation and fibrosis of the biliary tree. Immunologic and genetic factors appear to play a role in pathogenesis, although environmental factors such as cigarette smoking may modify the presentation of disease. Sclerosing cholangitis leads to recurrent acute cholangitis, liver failure, cholangiocarcinoma, or death. OLT is the only effective treatment option. Other hepatobiliary conditions seen in IBD include pericholangitis or small duct PSC, autoimmune hepatitis, cholelithiasis, and fatty infiltration of the liver. Patients with PSC typically have concomitant UC, but Crohn's colitis has also been described. The colitis is typically extensive in distribution but mild in activity, and rectal sparing is sometimes seen. Patients with UC and PSC are at risk for colorectal neoplasia. Whether sclerosing cholangitis is an independent risk factor for dysplasia and cancer is unclear, since the presence of sclerosing cholangitis may be a marker for longstanding pancolitis. Medical treatment of the colitis associated with sclerosing cholangitis is similar to that for IBD patients without liver disease. Patients who have undergone liver transplantation typically have milder colitis activity, perhaps due to accompanying immunosuppression. The presence of sclerosing cholangitis has important implications for surgical treatment of colitis, since proctocolectomy with ileostomy may lead to peristomal varices, which are difficult to treat. Ileal pouch-anal anastomosis leads to a higher frequency of pouchitis. © 1997 Crohn's & Colitis Foundation of America, Inc.