When assessing patients with chronic hepatitis B virus (HBV) infection, consider the state of viral replication, the immune response and whether viral mutations could be present, as well as evidence for liver disease or extrahepatic manifestations. In wild-type infections, loss of hepatitis B e antigen (HBeAg), gain of anti-HBe and disappearance of HBV DNA from serum indicate immunosuppression of viral replication, or ‘nonreplicative chronic HBV infection’. This ‘healthy carrier’ state must be distinguished from HBeAg-negative chronic hepatitis B (CHB) resulting from precore and core promoter mutations. HBeAg-negative CHB is common with genotypes D (Mediterranean region, south Asia) and C (north Asia) infections. Age, disease activity (alanine aminotransferase level) and severity (fibrosis stage, cirrhosis) influence treatment decisions. Following the marginal effectiveness of interferon and often temporary effectiveness of lamivudine due to drug resistance, treatment of CHB is entering a new era. Adefovir, entecavir, tenofovir, telbivudine and clevudine have equal or superior antiviral efficacy to lamivudine, whereas several agents are effective against lamivudine-resistant HBV. Pegylated-interferon (peginterferon) is superior to conventional interferon for obtaining sustained immunosuppression of HBV without drug resistance. Antiviral suppression of HBV replication for 2–5 years reverses hepatic fibrosis, prevents cirrhosis and, when cirrhosis is established, improves liver function, prevents hepatic decompensation and lowers the risk of liver cancer. Before embarking on immunosuppressive chemotherapy or organ transplantation in patients with chronic HBV infection, it is important to start antiviral therapy to prevent hepatitis flares. Antiviral therapy can be effective against membranous glomerulonephritis and polyarteritis nodosa caused by HBV. Further improvements in treatment of CHB are needed to prevent drug resistance and permanently suppress viral replication by eradicating viral templates or stimulating host immune responsiveness to HBV.