In an effort to determine the total one-year cost of liver transplantation, the underlying drivers of that cost, and any cost differences between alternative immunosuppressive regimens, an analysis was performed comparing the average one-year posttransplant charges of 322 patients participating in the “U.S. Multi-center Prospective Randomized Trial Comparing FK-506 to Cyclosporine in Liver Transplantation.” Total one-year inpatient charges including all réadmissions were examined. Professional fees and outpatient charges were excluded. Costs for tacrolimus drug and blood assays were assumed to be equal to those in the CsA group. For patients completing the study, the tacrolimus group had an average length of stay and average one-year cost seven days (P=.06) and $19,290 (P=.05) lower than the CsA group. The difference in rejection profiles between the two arms seems to largely account for the lower costs. The tacrolimus arm consistently had fewer patients in the more severe rejection groups. Increased incidence and severity of rejection were directly related to higher average lengths of stay and costs of transplantation (P < .001). Tacrolimus immunosuppression during the first year after liver transplantation is more cost-effective than CsA in achieving similar patient and graft survival rates. Differing incidence and severity of rejection can dramatically affect the first-year cost of liver transplantation.