Methotrexate-induced hepatotoxicity is well recognised in the treatment of leukaemia, psoriasis and rheumatoid arthritis. The pathological lesions are non-specific, consisting of fatty change, nuclear pleomorphism, hepatocyte necrosis, portal chronic inflammatory infiltrate, fibrosis and cirrhosis. The mechanism of liver injury is poorly understood; intracellular accumulation of methotrexate polyglutamate and consequent folate depletion are suspected to play a role. Early studies in psoriasis clearly established a relationship of the hepatic injury with the frequency of methotrexate administration. With weekly low dose therapy, however, consensus is lacking regarding the incidence of hepatotoxicity because studies have had disparate control groups, used variable dosage regimens and often failed to document pre-existing liver disease or categorised patients at risk, i.e. elderly patients, alcoholics and obese diabetics. Moreover, current methods of assessing the degree of hepatic injury are subjective, relying on interpretation by an experienced histopathologist. Preliminary evidence suggests less frequent and less severe hepatotoxicity occurs in patients with rheumatoid arthritis, probably as a result of lower methotrexate doses and better patient selection. Nevertheless, until the risk of serious liver disease is better defined it is recommended that patients have a pretreatment liver biopsy, a follow-up biopsy after a cumulative dose of 1500 mg, and then biopsies approximately every 2 years in the absence of other evidence of liver disease or risk factors.