Hepatic failure often occurs following transplantation. This is primarily due to cold ischemia during preservation, warm ischemia during implantation, and finally reperfusion damage after transplantation and reflow. The possibility that this ischemia and reperfusion‐induced damage can be reduced by preischemic application of a xanthine derivative (pentoxiphylline) was examined using 31P NMR spectroscopy and electron microscopy (EM) studies of bioenergetic and ultrastructural changes in oxygenated erythrocyte‐perfused rat livers. EM illustrated that the hepatocytes and the mitochondria appeared to be relatively unaffected by cold preservation of the liver, whereas the endothelial cells lining the sinusoids became disrupted. After reperfusion, NMR spectroscopy showed a partial recovery of ATP levels, and EM indicated progressive mitochondrial injury. This progressive injury to the liver was probably due to endothelial cell damage which resulted in microcirculatory malfunction and free radical formation during reperfusion. Pentoxiphylline pretreated livers showed better preservation of the cell morphology and exhibited better ATP recovery than untreated livers. Pentoxiphylline is known to prevent the loss of precursors of ATP resynthesis by inhibiting AMP dephosphorylation during ischemia and improves the microcirculation via vasodilatory properties following ischemia. Thus, it is concluded that pentoxiphylline may ameliorate ischemia‐induced cell damage during transplantation.