Seventy consecutive HBsAg- and HBeAg-positive patients with biopsy-proven chronic hepatitis were followed prospectively with serial determinations of SGPT levels and hepatitis B virus serum markers including HBsAg, HBeAg, anti-HBeand hepatitis B virus DNA. During a period of 1 to 11 years (mean ± S.D.: 5.0 ± 2.3 years), 28 patients remained persistently HBeAg positive, most with continuing biochemical and histologic activity, while 41 cases seroconverted to anti-HBe. One patient became HBeAg and anti-HBe negative. After seroconversion, 87.8% ofthe cases showed sustained normalization of SGPT, and clearance of hepatitis B virus DNA from serum and histologic improvement was documented in 79% of the cases who had a control liver biopsy, while 15.8% developed cirrhosis. In two patients (4.9%), the disease remained active despite seroconversion, and both cases had evidence of continuing hepatitis B virus replication. Finally, reactivation of liver damage and of hepatitis B virus replication was observed in three additional patients (7.3%) who had transiently normalized SGPT after seroconversion. All 70 patients were analyzed for hepatitis delta virus markers, and only two persistently HBeAg-positive cases were found positivefor antibody to hepatitis delta virus in serum, one also having hepatitis delta antigenin the liver. These findings indicate that, in chronic hepatitis type B, termination ofvirus replication is associated in most patients with biochemical and histologic regression of inflammatory activity. After anti-HBe seroconversion has occurred, virusreplication and liver disease may persist or reactivate in a small proportion of patients thus giving origin to the well-recognized group of anti-HBe positive, hepatitis B virus DNA-positive chronic hepatitis type B.