Canine liver homografts were placed into the pelvis with the host liver in place to study rejection without complicating hepatic failure. The initial morphologic lesion is a close approximation of mesenchymal to epithelial cells with subsequent “piecemeal” necrosis predominantly near the portal tracts. The rejected liver showed a progressive replacement of hepatocytes by histiocytes, macrophages, lymphocytes, plasma cells, fibroblasts and connective tissue; while vessels and large bile ducts persisted. The host lymph nodes and spleen exhibited an immune response with gamma globulin containing cells also noted in the graft. Gamma-globulin bound in vivo was found in hepatocytes, bile ducts, vessels and macrophages of the graft but not in the host liver. Complement and host serum globulin were bound to the same structures in vitro. The “antigen” to which serum globulin was bound seems to be of carbohydrate nature. Dogs with liver damage following vascular occlusion of a lobe in situ had circulating antinuclear and antiductular binding substances but no specific localization of gamma globulin or complement fixation in the damaged liver. These studies suggest one mechanism in the rejection of liver homografts which starts with antigen release from the graft, proceeds by antibody production by the host and by the formation or localization of antigen-antibody complexes in hepatocytes which are destroyed by a cytotoxic reaction. The role of delayed (cellular) hypersensitivity suggested by the histiologic analysis is not illuminated by the immunologic techniques applied.