Primary sclerosing cholangitis (PSC) is a condition of unknown etiology that causes progressive inflammation, fibrosis and obliteration of the intrahepatic and extrahepatic biliary tree. There is no medical cure, and ursodeoxycholic acid and other drugs have not been shown to affect the natural history of the disease. Endoscopic dilation is of value only in the relief of symptoms and complications related to dominant strictures. Cholangio- carcinoma occurs in a substantial minority of cases, especially those with ulcerative colitis and cirrhosis, and is often not clinically apparent before surgery. There are no good serologic tests for early cancers. Because this tumour has such a dismal prognosis, some authorities recommend that liver transplantation be undertaken before its development. This procedure is the only curative option for PSC, and excellent survival rates have been reported. There is evidence that early transplantation, before end stage liver disease or cholangiocarcinoma have developed, improves the survival and quality of life of patients with PSC. Because it is the only procedure of proven benefit, patients with PSC should be considered for liver transplantation early in the course of the disease.