The therapeutic goals in chronic hepatitis B are to prevent or decrease cirrhosis and hepatocellular carcinoma in patients with pre-cirrhotic or early cirrhotic disease and to stabilise patients with end-stage cirrhosis. Lamivudine is an oral nucleoside analogue that suppresses hepatitis B virus (HBV) replication, and so may achieve both these treatment objectives. The active 5′-triphosphate metabolite of lamivudine has two modes of viral suppression. First, it mimics deoxycytidine triphosphate and is incorporated into newly synthesised HBV DNA to cause chain termination. Second, it demonstrates competitive inhibition of viral DNA-dependent and RNA-dependent DNA polymerase activity (i.e., reverse transcriptase activity). Lamivudine may, therefore, act at four possible stages during HBV replication: reverse transcription of pre-genomic mRNA into nascent minus-strand DNA; formation of plus strand DNA from nascent minus-strand DNA; completion of double-stranded DNA; and formation of covalently closed circular DNA. In clinical studies, lamivudine therapy reduced serum HBV DNA and this was associated with significant improvements in liver histology and significant and sustained enhancement of the proliferative CD4-mediated response to HBeAg and hepatitis B core antigen (HBcAg), and an increased frequency of HBeAg-specific T cells. HBV DNA concentrations often returned to pre-treatment values when therapy ended prior to the loss of hepatitis B e antigen (HBeAg). Although the emergence of HBV variants with a mutation in the YMDD (tyrosine-methionine-aspartate-aspartate) motif has been observed, such variants show reduced susceptibility to lamivudine due to limited replication competence, and their emergence is not a signal to cease lamivudine therapy. In conclusion, viral suppression with lamivudine offers a means of disease improvement and immunological control in chronic hepatitis B. J. Med. Virol. 61:367–373, 2000. © 2000 Wiley-Liss, Inc.