To elucidate the biologic significance of hepatocyte HBsAg, its expression patterns were correlated with virus replication and liver pathology in 578 liver biopsies taken from chronic HBsAg carriers aged 1 to 80 years. Five major patterns of hepatocyte HBsAg were identified: homogeneous [intense and discrete, (Pattern A), faint and discrete, (Pattern B) and faint and grouped (Pattern C)]; globular or spotty (Pattern D), and marginal (Pattern E). Pattern A was always associated with viremia and also very frequently with membrane HBsAg expression, but rarely with active liver disease. It occurred most commonly in HBeAg-positive carrier children and young adults, reflecting an early immune tolerance phase with active virus replication. Pattern B was also usually associated with viremia, but very commonly associated with active disease (70%), reflecting active virus replication with enhanced immune response. Pattern E (marginal HBsAg), which was always in group distribution resembling a clonal expansion, predominated the HBeAg-negative phase and was associated with absence of viremia and occurred mostly in older adults with inactive bipolar disease spectrum (normal liver/mild disease or cirrhosis/hepatocellular carcinoma); this reflects a late phase of inactive virus replication or integration. Patterns C and D did not correlate well with viremia, but also tended to have inactive diseases as did Pattern E. These findings suggest that hepatocyte HBsAg expression is closely related to the natural course of chronic hepatitis B virus infection.