This placebo controlled, double-blind study evaluated the efficacy and safety of lamivudine in patients with hepatitis B e antigen (HBeAg)-negative/hepatitis B virus (HBV) DNA–positive chronic hepatitis B. Patients were randomized to receive 100 mg lamivudine orally once daily for 52 weeks (n = 60) or placebo for 26 weeks (n = 65). Patients who were HBV DNA positive at week 24 were withdrawn at week 26. The primary efficacy endpoint was loss of serum HBV DNA plus normalization of alanine transaminase (ALT) at week 24. A significantly higher proportion of patients receiving lamivudine (63%) had a complete response at week 24 compared with patients receiving placebo (6%) (P < .001). Secondary efficacy parameters included histological response from baseline to week 52 in the lamivudine-treated patients. At week 52, 60% of lamivudine-treated patients with liver biopsy specimens available showed histological improvement (≥2-point reduction in Knodell necro-inflammatory score), 29% showed no change, and 12% worsened. In a ranked assessment of pretreatment and post-treatment biopsy pairs 11% improved, 86% showed no change, and 2% worsened in fibrosis. At week 52, 27% of patients receiving lamivudine had YMDD (tyrosine-methionine-aspartate-aspartate amino acid motif of HBV polymerase) variant HBV. The incidence of adverse events and laboratory abnormalities was similar in both groups. In conclusion, lamivudine treatment results in a significant virological and biochemical improvement compared with placebo, induces an improvement or no change in histology in most patients, and is well tolerated. The response to lamivudine therapy in HBeAg-negative patients is similar to the response reported in previous studies of patients with HBeAg-positive chronic hepatitis B.