Autoimmune hepatitis (AIH) is a disease of unknown etiology. However, a loss of tolerance against the patient's own liver is regarded as the main pathogenetic mechanism. Immunosuppressive therapy prolongs survival in patients with severe AIH. Two phases of therapy have to be distinguished. In newly diagnosed AIH, induction of remission is the main goal. Here predniso(lo)ne alone or in combination with azathioprine has been shown to induce remission in the majority of patients. In the past, reduction of aminotransferase levels below two times the upper limit of normal was the aim of therapy. Nowadays, normalization of aminotransferase levels should be achieved. The majority of patients usually respond to therapy within 6-12 months. A significant reduction in aminotransferase levels is achieved within a few weeks of therapy. Improvement in clinical symptoms is followed by improvement in biochemical parameters of disease activity and then by significant improvement in histological disease activity. Around 20-40% of patients do not achieve remission. In these patients, alternative therapies should be evaluated for the individual patient. Prospective controlled trials with a larger number of patients are missing in this population. At the moment, mycophenolate mofetil at a dose of 2 × 1 g daily, either given alone or in combination with predniso(lo)ne, is able to achieve remission in a significant proportion of patients. Based on recent retrospective observations, mycophenolate mofetil is beneficial in patients who were previously azathioprine intolerant rather than azathioprine failure patients. Again, prospective trials are missing. Alternative drugs include cyclophosphamide, cyclosporin A, tacrolimus and others. Women in particular suffer from steroid-specific side effects, including weight gain, moon face, diabetes, glaucoma and bone disease. Recently, a topical steroid, budesonide, was shown to induce disease remission in combination with azathioprine. The second phase of therapy is maintenance of remission with the lowest possible dose in order to maintain remission while preventing significant side effects. Careful evaluation of the individual patients should lead to the decision whether predniso(lo)ne, budesonide, azathioprine or a combination of one of the steroids with azathioprine is to be used to maintain remission. Recently, a study has shown that after 6 months of induction therapy with prednisone plus azathioprine, a switch to budesonide in combination with azathioprine reduced steroid-specific side effects while maintaining remission of liver disease. Therefore, the application of the topical steroids may be helpful in maintaining remission while reducing steroid-specific side effects. Patients with liver cirrhosis should not be treated with budesonide since the benefit of budesonide with its 90% pass effect in the liver is lost if the patient has already developed portal hypertension with significant portosystemic shunting. Furthermore, there are safety concerns regarding budesonide use in cirrhotic patients derived from studies in primary biliary cirrhosis. If the diagnosis is correct and the appropriate therapy is chosen, liver transplantation should be avoidable in patients with AIH.