Hepatitis Be antigen (HBeAg)-negative chronic hepatitis B (CHB) is associated with hepatitis B virus (HBV) variants harbouring changes in the precore region. Most commonly, a G to A point mutation at nucleotide 1896 (m1896) creates a novel translation stop codon that prevents HBeAg production. In the Mediterranean region the m1896 mutation prevails in greater than 98% of HBeAg-negative CHB patients. In this study the prevalence of additional mutations in the precore region was investigated among patients with chronic HBV infection. Precore sequences were determined by sequencing serum HBV DNA amplified by polymerase chain reaction (PCR) with primers flanking the precore/core region. Thirty-one HBeAg-negative and five HBeAg-positive individuals were studied. All HBeAg-negative patients (100%) harboured the m1896 mutation and 20 (64.5%) also had a G to A mutation at nucleotide 1899 (m1899). Additional mutations affecting the translation initiation of the precore gene were found in seven (22.5%) patients, all with active liver disease, five of whom had episodes of HBV reactivation. HBeAg-positive patients had no mutations in these positions and neither did any of the five HBeAg-negative patients with normal levels of liver enzymes, representing the healthy carrier state of HBV infection. Serial sample analysis from one patient revealed that the initiation codon mutation developed following HBeAg seroconversion and the appearance of m1896. During periods of high HBV replication, the ratio of mutant to wild-type ATG was found to increase in parallel with HBV DNA levels. These data show that a significant proportion of HBeAg-negative patients who already harbour the 1896 stop codon mutation may subsequently develop precore translation initiation mutations, which appear to be associated with enhanced HBV replication and severe liver disease.