Cluster of differentiation (CD)56⁺ lymphocytes are believed to play important roles in the innate immune response to viral infections by production of interferon (IFN)‐γ and/or the recognition of virally infected cells, but their role in liver transplantation (LT) has not been characterized. Here, for the first time, we examine the phenotypic and functional features of these cells in patients undergoing LT for hepatitis C virus (HCV)‐related liver failure. The study was comprised of four patient groups: patients with mild HCV recurrence (n = 9), severe HCV recurrence (n = 10), patients with non‐HCV‐related liver failure (n =10), and normal healthy subjects (n = 10). Pre‐LT, the frequency of circulating CD56⁺ lymphocytes was significantly lower in patients who subsequently developed severe HCV recurrence, relative to those patients who developed mild histologic recurrence, as well as non‐HCV controls. HCV was associated with impaired lymphokine‐activated killing and natural cytotoxicity. We found that natural T (NT) cells that coexpressed CD4/CD8 or expressed CD8 alone were more frequent in patients who subsequently developed severe recurrence. In contrast, NT cells that expressed only CD4 appeared to be depleted in HCV infection relative to controls. A significantly higher percentage of NTs in both HCV groups expressed the inhibitory receptor NKG2A relative to HCV‐negative controls with liver disease. In conclusion, these results demonstrate a previously unappreciated association between pretransplantation CD56⁺ lymphocytes and outcome of HCV recurrence and provide novel mechanistic insights into the immunopathogenesis of HCV recurrence, as well as potential targets for therapeutic manipulation. Liver Transpl 14:31–40, 2008. © 2007 AASLD.