Chronic hepatitis B can be diagnosed in patients with increased aminotransferases, hepatitis B virus viraemia and necroinflammation with fibrosis on liver biopsy. Although, ideally, all patients with chronic hepatitis B should be treated, therapeutic intervention is currently recommended for cases with a relatively satisfactory likelihood of response and/or advanced disease. A realistic therapeutic approach aims to sustain hepatitis B e antigen (HBeAg) loss and hepatitis B e antibody (anti-HBe) seroconversion in HBeAg-positive chronic hepatitis B and to sustain biochemical and virological remission in HBeAg-negative chronic hepatitis B. Currently, three drugs are licensed for chronic hepatitis B: interferon-alpha, lamivudine and adefovir dipivoxil. In patients with HBeAg-positive chronic hepatitis B, all of these drugs achieve HBeAg loss (24–33%) and anti-HBe seroconversion (12–30%) rates significantly superior to those observed in untreated placebo controls. In patients with HBeAg-negative chronic hepatitis B, the sustained off-therapy response rate is 20–25% after a ≥ 12-month course of interferon-alpha and minimal (< 10%), if any, after a 12-month course of lamivudine or adefovir. Long-term lamivudine induces an initial response in 70–90% of patients, but only 30–40% of patients remain in remission after the third year due to progressively increasing viral resistance. Long-term adefovir achieves a response in approximately 70% of patients at 12 months, which is maintained at 24 months with rare (< 2%) drug resistance. Adefovir is also effective against lamivudine-resistant strains. Many other anti-viral agents, immunomodulatory approaches and combination therapies are currently being evaluated in chronic hepatitis B.