To evaluate the frequency, pattern, and severity of liver function test abnormalities in patients with Lyme disease associated with erythema migrans (EM), 115 individuals with no other identifiable cause for liver function test abnormalities who presented with EM between July 1990 and September 1993 were prospectively evaluated. For individuals with abnormal liver function tests, common causes of hepatitis, including hepatitis A, B, and C, were excluded. A local control group was used for comparison. Forty-six (40%) patients had at least one liver test abnormality, and 31 (27%) had more than 1 abnormality compared with 19 (19%) and 4 (4%) of controls, respectively (P < .01 for each comparison). gamma-Glutamyl transpeptidase (28%) and alanine transaminase (ALT) (27%) were the most frequently elevated liver function tests among Lyme disease patients. Anorexia, nausea, or vomiting was reported by 30% of patients, but did not occur more frequently in patients with elevated liver function tests compared with those with normal values. Patients with early disseminated Lyme disease were more likely to have elevated liver function studies (66%) compared with patients with localized disease (34%) (P = .002). After antibiotic treatment, elevated liver function tests improved or resolved in most patients. Liver function test abnormalities are common in patients with EM but were mild, most often not associated with symptoms, and improved or resolved by 3 weeks after the onset of antibiotic therapy in most patients.