Nonadherence to immunosuppressant medications is a leading cause of poor long‐term outcomes in transplant recipients. The Medication Level Variability Index (MLVI) provides a vehicle for transplant outcome risk‐stratification through continuous assessment of adherence. The MALT (Medication Adherence in children who had a Liver Transplant) prospective multi‐site study evaluated whether MLVI predicts late acute rejection (LAR). Four hundred pediatric (1–17‐year‐old) liver transplant recipients were enrolled and followed for 2 years. The a‐priori hypothesis was that a higher MLVI predicts LAR. Predefined secondary analyses evaluated other outcomes such as liver enzyme levels, and sensitivity analyses compared adolescents to pre‐adolescents. In the primary analysis sample of 379 participants, a higher prerejection MLVI predicted LAR (mean prerejection MLVI with LAR: 2.4 3.6 standard deviation versus without LAR, 1.6 1.1; p = 0.026). Fifty‐three percent of the adolescents with MLVI>2 in year 1 had LAR by the end of year 2, as compared with 6% of those with year 1 MLVI≤2. A higher MLVI was significantly associated with all secondary outcomes. MLVI, a marker of medication adherence that uses clinically derived information, predicts LAR in pediatric liver transplant recipients. The medication level variability index, a measure of adherence to immunosuppressant medications, predicts late acute rejection and liver injury, and may be used to stratify risk and inform interventions before adverse outcomes occur in pediatric liver transplant recipients.