Abstract From study of liver biopsy sections and chemical liver function tests one can only hope for present purposes to obtain rather gross information as to the activity of the process which has resulted or is resulting in liver damage, and information as to the extent and duration of the process. Activity is correlated histologically with phagocytic cell infiltration and with hepatocellular change as manifested by widespread multinucleation, abnormalities of cell shape and size, and abnormalities of staining characteristics. The chemical abnormalities which indicate activity are the cephalin cholesterol flocculation and thymol turbidity tests as well as elevation of the serum bilirubin and/or icterus index. Extent and duration of the hepatotoxic process are manifested histologically by hepatocellular change and by fibrosis. The chemical changes which are found in liver damage of widespread extent and/or long duration are abnormal bromsulfalein retention, diminished hepatic glycogen storage and elevation of the serum bilirubin and/or icterus index. It is to be emphasized that the above observations are extremely superficial and have nothing to recommend them but their simplicity. From the foregoing it is evident that our knowledge of liver histology and physiology is in need of many additions; and that when such additional knowledge is obtained, revision of the present archaic classification of liver disease will be in order. An approach to such a reclassification is presented.