This report describes a patient with marked hypoxemia caused by intrapulmonary shunt associated with primary biliary cirrhosis. Liver transplantation resulted in resolution of digital clubbing and reduction of intrapulmonary shunt as demonstrated by normalization of room air arterial blood gases, reduction in shunt fraction and normalization of the indocyanine-enhanced echocardiogram and perfusion lung scan. This patient's course challenges the conventional notion that intrapulmonary shunting associated with chronic liver disease does not reverse after liver transplantation.