The effect of interferon alfa (IFN-α) therapy on the expression of transforming growth factor alpha (TGF-α) in the liver during chronic hepatitis B was investigated. Serial liver biopsy specimens were evaluated from 35 patients who had participated in a randomized, controlled trial of recombinant human IFN-α for the treatment of chronic hepatitis B. Percutaneous liver biopsy specimens obtained before and 1 year after entry in the trial were sectioned and stained with a monoclonal antibody to TGF-α in an avidin-biotin-peroxidase-complex system. The expression of TGF-α in each section was evaluated blindly (with respect to treatment group and order of biopsies) and was numerically scored. There was no significant difference in TGF-α expression before or after therapy between 13 patients receiving daily IFN-α, 13 receiving alternate-day IFN-α, and 9 receiving no therapy. Sustained clearance of HBV-DNA and DNA polymerase activity occurred in 8 of 26 treated patients (“responders”); the 18 other patients were “nonresponders.” Expression of TGF-α before IFN-α therapy was significantly higher in responders than in nonresponders; after IFN-α therapy, TGF-α expression decreased significantly among responders compared with nonresponders and untreated controls. Thus, the level of expression of TGF-α in the liver, which was correlated with the severity of inflammation in the liver in this study, appeared to be predictive of the response to IFN-α therapy in chronic hepatitis B, with a higher level of expression indicating a greater likelihood that the patient would respond. (HEPATOLOGY 1995; 22:1021–1026.).