Adefovir dipivoxil (bis-POM PMEA) is an adenine nucleotide analogue with activity against retroviruses and herpesviruses, and in vitro activity against hepatitis B virus (HBV). This study was conducted to evaluate its safety and antiviral activity in patients with chronic HBV infection. Twenty patients (13 co-infected with human immunodeficiency virus, HIV) were randomized in a phase I/II, double-blind, placebo-controlled study. Patients who had been hepatitis B surface antigen (HBsAg)/hepatitis B e antigen (HBeAg) positive for ≥ 6 months, with elevated hepatic transaminases and serum HBV DNA ≥ 50 pg ml–1, were randomized to adefovir dipivoxil 125 mg (n = 15) or placebo (n = 5) as a single, daily, oral dose for 28 days. Antiviral activity was assessed by changes in serum HBV DNA (using the Digene Hybrid Capture assay) and HBeAg/hepatitis B e antibody (HBeAb) status. HBV DNA levels fell rapidly by > 1 log10 in all active drug recipients (median fall 1.8 log10 pg ml–1) but increased by 0.01 log10 pg ml–1 in controls (P = 0.002). Reductions were sustained during treatment. HBV DNA returned to baseline over 1–6 weeks following discontinuation of active drug. HBeAg became transiently undetectable in one patient on treatment and, in another, sustained seroconversion to HBeAb occurred 12 weeks after treatment ended. Liver transaminase elevations > 300 U l–1 were observed in three patients during therapy (leading to protocol-specified treatment discontinuation or dose reduction) and in four patients during follow-up. On-treatment transaminase elevations were associated with HIV status, occurring in three of six HIV-uninfected patients compared with none of nine who were HIV infected. In addition, a slower return to baseline of serum HBV DNA levels was observed in the non-HIV-infected patients. Treatment for chronic hepatitis B as a once-daily oral dose was well tolerated and associated with significant and sustained reductions in serum HBV DNA levels during treatment. Transaminase elevations, which may be related to the therapeutic effect, were observed during and after treatment. Further studies are warranted to investigate the safety, and optimum dose and duration, of adefovir dipivoxil treatment for chronic hepatitis B.