A gene region encoding a segment of the major surface protein, HBsAg, of hepatitis B virus was analyzed from serum samples after orthotopic liver transplantation of three hepatitis B virus chronic carrier patients treated with a human anti—hepatitis B virus monoclonal antibody (SDZ OST 577). Each of these three patients became HBsAg negative after transplantation and therapy with the human anti—hepatitis B virus monoclonal antibody but returned to HBsAg positivity (first detected 143,251 and 252 days after the transplantation). Polymerase chain reaction DNA amplification was performed on DNA from serum samples showing low levels of recurrent HBsAg and reduced antigen reactivity with SDZ OST 577 antibody. Polymerase chain reaction DNA included a 230-bp highly conserved, major S gene region that was cloned into M13 bacteriophage; analysis of this DNA segment provided a consensus of DNA sequences for the serum samples exhibiting altered reactivity with the therapeutic monoclonal. Analysis of independent DNA clones from serum samples of patients exhibiting low but detectable recurrent serum levels of posttherapy HBsAg revealed the presence of S protein variant sequences when compared with polymerase chain reaction DNA derived from the original infected liver or pretherapy serum HBsAg. Genetic variation was predominant in a highly conserved peptide domain that has previously been implicated in antibody binding and neutralizing antibody epitopes. In independent patients infected with either adw or ayw hepatitis B virus subtypes, single nucleotide changes resulted in one to two amino acid differences for each variant allele (residues 124, 129, 131, 137, 140 and/or 145) when compared with pretherapy viral DNA. Administration of serum containing one of these variant viruses to a single hepatitis B—naive chimpanzee resulted in subclinical hepatitis and detectable levels of circulating anti-HBs and anti-HBc antibodies 49 and 70 days after virus administration, respectively. Hepatitis B virus DNA was recovered on liver biopsy between 6 and 8 wk after inoculation, although the animal remained persistently seronegative for HBsAg. DNA sequence analysis of both primate and patient liver hepatitis B virus confirmed the presence of the DNA encoding the S protein variant and associates this DNA with the predominant hepatotropic virus in liver infection. (HEPATOLOGY 1992;15:757–766).