The precore-core gene of hepatitis B virus (HBV) was directly sequenced from serum samples of 42 patients with chronic B hepatitis (19 hepatitis B e antigen [HBeAg]+ and 23 anti-HBe+). Viral genotypes were determined by comparison with 11 reference sequences and by restriction analysis. Genotype A was identified in 16 cases, genotype D in 24 cases, and other genotypes in 2 cases. Precore mutations, mainly M1 (stop at codon 28), were differently distributed among the viral genotypes: 3 cases (18.8%) with genotype A and 18 cases (75%) with genotype D. In sequences with precore mutants, the encapsidation signal was more stable (negative stabilization energy) than in sequences without precore mutants. In genotype A, the M1 mutation coexisted with a second mutation (C → T at position 1858 in codon 15), and both mutations were paired in the secondary structure of the RNA encapsidation signal, which justified the rare presence of precore mutants in this genotype. The analysis showed different distribution of mutations depending on the viral genotype; patients with genotype D were more likely to have persistent HBV infection by selection of precore mutants. Multiple amino acid substitutions were detected in the core region, mainly in two subsequences that have been previously described as epitopes (flanked by codons 11 to 27 and 74 to 83); the presence of these mutations was significantly related to the presence of precore variants which abolished the expression of HBeAg. The study of viral genotypes in chronic HBV infection may be valuable in predicting the persistence of viral replication after seroconversion to anti-HBe and suggest that the outcome of chronic infection may be affected by the HBV variability. (Hepatology 1995; 22:1641-1647).