This study reports the Emory experience with 147 distal splenorenal shunts (DSRS) and 110 orthotopic liver transplants (OLT) between January 1987 and December 1991. The purpose was to clarify which patients with variceal bleeding should be treated by DSRS versus OLT. Distal splenorenal shunts were selected for patients with adequate or good liver function. Orthotopic liver transplant was offered to patients with end-stage liver disease who fulfilled other selection criteria. The DSRS group comprised 71 Child's A, 70 Child's B, and 6 Child's C patients. The mean galactose elimination capacity for all DSRS patients was 330 ± 98 mg/minute, which was significantly (p < 0.01) above the galactose elimination capacity of 237 < 82 mg/minute in the OLT group. Survival analysis for the DSRS group showed 91% 1-year and 77% 3-year survival, which was better than the 74% 1-year and 60% 3-year survivals in the OLT group. Variceal bleeding as a major component of end-stage disease leading to OLT had significantly (p < 0.05) poorer survival (50%) at 1 year compared with patients without variceal bleeding (80%). Hepatic function was maintained after DSRS, as measured by serum albumin and prothrombin time, but galactose elimination capacity decreased significantly (p < 0.05) to 298 ± 97 mg/minute. Quality of life, measured by a self-assessment questionnaire, was not significantly different in the DSRS and OLT groups. Hospital charges were significantly higher for OLT (median, 113,733) compared with DSRS (32,674). These data support a role for selective shunt in the management of patients with variceal bleeding who require surgery and have good hepatic function. Transplantation should be reserved for patients with end-stage liver disease. A thorough evaluation, including tests of liver function, help in selection of the most appropriate therapeutic approach.