In order to evaluate the prognostic implications of the hepatitis B e system in patients with chronic persistent hepatitis (CPH), 53 consecutive patients were studied. Fourteen of 16 patients with HBsAg and HBeAg were followed from 12 to 120 months (mean, 38 months). Eleven of the 14 patients were persistently HBeAg positive and five of these developed chronic active hepatitis (CAH) or cirrhosis. A further nine patients were HBsAg positive but HBeAg negative at time of CPH diagnosis (mean follow-up, 47 months). One of these nine patients developed CAH during follow-up. The remaining 28 patients were all HBsAg negative, and only 2 of the 28 patients progressed to CAH or cirrhosis during the time of follow-up (mean, 43 months). It is concluded that the persistence of HBeAg in patients with CPH indicates a serious prognosis with a frequent transition to CAH or cirrhosis.