Chronic hepatitis B infection is a worldwide public health problem, which is particularly important in countries of Asia. Interferon has long been available for the treatment of patients with active replication (hepatitis B virus (HBV) e antigen and HBV-DNA positive) with evidence of chronic liver disease (elevated serum alanine aminotransferase and chronic hepatitis on liver biopsy). Doses of interferon of 10 MU, t.i.w. or 5 MU, q day for 16 weeks result in e antigen and HBV-DNA loss in approximately one-third of individuals who meet these treatment criteria. The major limitations of interferon are: (i) side effects of influenza-like symptoms; (ii) need for parenteral administration; and (iii) concerns about safety in patients with hepatic decompensation. Nucleoside and nucleotide analogues have potent antiviral activity. The largest experience is with lamivudine (3-thiacytadine), a reverse transcriptase inhibitor that was recently approved by the USA Federal Drug Administration. At doses of 100 mg/day for 52 weeks, suppression of HBV replication is almost universal, with e antigen loss and improvement in histology being achieved in one-third and two-thirds of patients, respectively. The major advantages of lamivudine are: (i) good tolerability; (ii) oral route of administration; and (iii) safety in patients with hepatic decompensation. The major disadvantage is drug resistance, which is observed with increasing frequency following prolonged administration. New agents, such as adefovir dipivoxil, offer promise either alone or in combination with lamivudine in the treatment of individuals who are ‘treatment naive’ as well as in the treatment individuals who have developed lamivudine resistance.