More than 400 million people worldwide are chronically infected by the hepatitis B virus. The virus is responsible for more than 300000 cases of liver cancer every year and for similar numbers of gastrointestinal haemorrhage and ascites. Major breakthroughs have been achieved in diagnosis and treatment of this virus. Hepatitis B vaccine reduces incidence of liver cancer. As with hepatitis C, advances have been made in molecular virology, especially for naturally occurring and treatment-induced mutant viruses. The clinical significance of low viral load and genotypes are also under investigation. Currently available monotherapies-interferon, lamivudine, and adefovir dipivoxil-very rarely eradicate the virus, but greatly reduce its replication, necroinflammatory histological activity, and progression of fibrosis. Lamivudine, and presumably other nucleoside analogues, can reverse cirrhosis of the liver.