Adefovir dipivoxil (ADF) is a novel acyclic nucleoside analogue that has recently been approved for the treatment of chronic hepatitis B virus (HBV). Adefovir was initially assessed at higher doses for the treatment of human immunodeficiency virus (HIV) infection. However, in these studies, nephrotoxicity proved a dose-limiting side effect. Large randomised controlled studies have recently shown that ADF results in histological, virological and biochemical improvement in both hepatitis B e antigen (HBeAg)-positive and HBeAg-negative chronic HBV. While the rate of HBeAg seroconversion at 1 year (12%) was lower than both lamivudine and interferon, this increases with prolonged treatment. The clinical improvements occurred without serious side effects or the development of resistance at the dose of 10 mg daily, in treatment trials of up to 2 years, although resistance has now been observed. In addition, the drug is efficacious in HBV/HIV co-infection and hepatitis B-infected liver transplant recipients, particularly in those who have developed lamivudine resistance. ADF can be added as a treatment option to existing treatment options (interferon-alpha and lamivudine) and assumes a role in the ongoing management of chronic HBV. The optimal use of ADF as either a monotherapy or as part of combination therapy requires further assessment.