In a previously reported randomized controlled trial of interferon-α (IFN-α) for chronic hepatitis B, we found a significant difference in response between Chinese adults with elevated vs normal pretreatment aminotransferase (ALT) levels. The aim of this study was to determine the correlation between serum hepatitis B virus (HBV) DNA levels and response to IFN therapy. HBV DNA levels in residual stored sera from patients who participated in the above trial were quantified by a branched DNA (bDNA) assay. Nominal logistic regression was used to estimate the probability of response to IFN treatment as a function of pretreatment ALT and/or HBV DNA levels. We found a significant (P<0.01) correlation between the HBV DNA levels at midtreatment and response to IFN therapy. Response was achieved in 53% of patients who had undetectable HBV DNA levels at midtreatment but in only 17% of those who remained HBV DNA positive (P<0.01). In contrast, the probabilities of response for patients with baseline HBV DNA levels over the range 10 to 10000 million equivalents (MEq)ml–1 were almost identical. We also found a significant correlation between the pretreatment ALT levels and response to IFN therapy. The probabilities of response for patients with pretreatment ALT levels of 500 and 100IUl–1 were higher than for patients with normal ALT levels by two and onefold, respectively. Our findings may help to improve the cost-effectiveness of IFN therapy for chronic hepatitis B by guiding the selection of patients for therapy and in optimizing the duration of treatment for the individual patient.