Chronic hepatitis B is a worldwide public health challenge. Knowledge of natural history of chronic hepatitis B is important for the management of the disease. A community-based prospective cohort study was carried out to evaluate the risk predictors of progression of chronic hepatitis B in Taiwan. A total of 23 820 participants were enrolled in 1991–1992 from seven townships in Taiwan. Their serum samples were collected at study entry and tested for hepatitis B surface antigen (HBsAg) and e antigen (HBeAg), antibodies against hepatitis C virus (anti-HCV), alanine aminotransferase (ALT), and α-fetoprotein (AFP). A subcohort of 3653 male and female participants who were seropositive for HBsAg and seronegative for anti-HCV was included in the Risk Evaluation of Viral Load Elevation and Associated Liver Disease/Cancer-Hepatitis B Virus (REVEAL-HBV) study. Newly developed cases of cirrhosis and hepatocellular carcinoma (HCC) were ascertained through follow-up examination and data linkage with profiles of the National Cancer Registry, National Health Insurance Database and Death Certification System. The incidence of both HCC and cirrhosis were significantly associated with serum HBV DNA levels in a dose-response relationship from < 300 (undetectable) to ≥ 1 000 000 copies/mL. The biological gradients remained significant (P < 0.001) after adjustment for age, sex, habits of cigarette smoking and alcohol drinking, HBeAg serostatus, and serum ALT level at cohort entry. A significant association with risk of cirrhosis and HCC was also observed for HBV genotype, precore G1896A mutant and basal core promoter A1762T/G1764A double mutant. Nomograms have been developed for the long-term risk prediction of cirrhosis and HCC for patients with chronic hepatitis B. Inactive carriers of HBV have an increased HCC incidence and liver-related mortality than HBsAg-seronegative controls. Serum HBV DNA level at study entry is a major predictor of spontaneous seroclearance of HBeAg, HBV DNA and HBsAg. These findings may inform the effective and efficient management of chronic hepatitis B.