Interferon-alpha (IFN-α) has been the only approved agent for the treatment of chronic hepatitis B in most countries, but this is rapidly changing. It is expensive, associated with frequent and unpleasant side effects, has limited efficacy and is ineffective in subjects with no/mild liver necro-inflammation. Loss of HBsAg and viral replication markers occur 6% and 20%, more often in IFN-treated subjects than controls. The most important factors that will predict favourable response to IFN-α therapy are elevated ALT and low serum HBV DNA levels. Chinese patients and children with active liver have similar response rates as Caucasian adults with equivalent ALT levels. Patients with HBeAg negative disease fare less well. Long-term follow up has shown that most IFN responders maintained their response although very few people have complete eradication of HBV.