The advances made in surgical technique, postoperative care, and immunosuppression during the 1980s have permitted orthotopic liver transplantation (OLT) to evolve into an effective and widely accepted therapy for infants and children with end-stage liver disease. Biliary atresia, a progressive, obliterative disease of the bile ducts, is the most common indication for OLT in children, accounting for approximately 50% of cases. Metabolic liver disease (MLD) accounts for 20% to 25%; other common indications for OLT include fulminant hepatic failure (FHF) and forms of intrahepatic cholestasis. The principal problem associated with the increasing application of OLT is the burden placed on resources, particularly the availability of donor organs. The limited pool of size-matched donor organs has led to the application of a variety of alternatives to address the needs of the pediatric recipient; these include (1) reduced-size liver transplantation, (2) "split-liver" transplantation, and (3) use of living-related organ donors. In view of the impact on overall organ availability, the use of nontransplant options, including liver cell transplantation, especially for FHF and MLD, deserves broader application. Despite the success of transplantation, major challenges in childhood liver transplantation remain, including (1) improved preoperative management to ensure adequate growth, (2) more precise posttransplant management of immunosuppression to ensure graft viability and avoidance of lymphoproliferative disease, (3) earlier recognition of cytomegalovirus and Epstein-Barr virus infection, and (4) provision of services in a more cost-effective manner. The ultimate solution is to prevent liver disease through vaccination and research.