A 45-year-old HBsAg carrier (HBeAb positive with normal liver function tests) underwent renal transplantation for mesangioproliferative glomerulonephritis. Sixteen months later he developed jaundice. Investigations showed he remained HBeAb positive, but HBV-DNA levels were 99 pg/ml, indicating active replication of a HBV pre-core mutant. He was commenced on lamivudine therapy with a subsequent rapid fall in HBV-DNA levels to 2.8 pg/ml, but liver function tests continued to deteriorate and he developed hepatorenal failure. Liver biopsy showed fibrosing cholestatic hepatitis. He underwent liver transplantation, which was complicated by lactic acidosis. Lamivudine was withdrawn and HBV prophylaxis with HB immunoglobulin was commenced. Unfortunately he died 38 days post-transplant of surgical complications with no evidence of HBV recurrence. We discuss the use of nucleoside analogues in fibrosing cholestatic hepatitis and review the literature.