Nine HBeAg+ and 24 anti-HBe+ subjects with chronic hepatitis B virus (HBV) infection were studied for HBV DNA in the serum by molecular hybridization, for HBeAg in the liver by immunofluorescence, and for histologic evidence of liver disease. All HBeAg+ patients had underlying chronic liver disease (chronic persistent hepatitis, chronic active hepatitis, or cirrhosis with or without hepatocellular carcinoma), and all were found positive for both HBV DNA in the serum and HBeAg in the nucleus of hepatocytes. Of the 24 anti-HBe+ individuals, 18 had various forms of chronic liver disease. Six HBsAg+/anti-HBe+ patients had normal liver histology except for numerous “ground-glass” hepatocytes with abundant cytoplasmic HBsAg. All six were negative for nuclear HBeAg and serum HBV DNA, but three showed HBV DNA which appeared to be integrated into unique sites in host liver DNA by hybridization analysis. In contrast, 14/18 (78%) of HBsAg+/anti-HBe+ patients with chronic liver disease were positive for nuclear HBeAg, serum HBV DNA, or both of these markers of HBV replication. It is suggested that in long-term HBsAg carriers with serum anti-HBe and normal liver histology, viral replication is suppressed or inactive and HBV potential infectivity is presumably very low or absent. However, when viral replication is present in HBsAg+/anti-HBe+ carriers (as demonstrated by serum HBV DNA and/or nuclear HBeAg), active liver disease is often found. In these individuals, active chronic liver disease appears to be related to continued replication and secretion of HBV and may occur in a much higher proportion of HBsAg+/anti-HBe+ carriers than was previously suspected.