Cytomegalovirus (CMV) infection of the gastrointestinal (GI) tract has been reported in immunocompromised patients and is seen following liver transplantation. Although CMV infection can affect any part of the GI tract, involvement of the terminal ileum is rarely encountered after liver transplantation. We report a case of a 32-year-old male who developed CMV infection of the terminal ileum while receiving immunosuppression for liver transplantation. Initial ganciclovir treatment did not improve the patient's symptoms and therapy was then switched to foscarnet which ultimately resulted in resolution of infection. However the patient continued to have symptoms because of intermittent small bowel obstruction because of ulcerations and fibrosis ultimately requiring surgical resection. CMV DNA polymerase chain reaction (PCR) was negative throughout the course of infection. Surgical resected specimen revealed no evidence of inflammatory bowel disease (IBD). Follow up colonoscopy up to a year after infection also did not reveal any evidence of IBD. Compartmentalization in the clinical presentation of CMV involving GI tract can be seen with a negative blood DNA PCR. Histological diagnosis thus forms an important part in the clinical follow-up of liver transplant patients undergoing intense immunosuppression and should be aggressively pursued in patients with GI symptoms. De novo IBD should be considered in the differential diagnosis in these patients who do not improve with anti-viral treatment.