A decade ago an antigen was identified by immunodiffusion and subsequently proved to be closely associated with hepatitis B virus. Further studies showed that hepatitis B virus circulates as a large particle containing a protein coat and a DNA core, and that excess coat particles are produced and circulate freely. Immunization with surface protein produced protective antibodies, and this led to the development of a prototype vaccine. Patients with hepatitis may develop a variety of extrahepatic manifestations, including polyarteritis, vasculitis, and glomerulonephritis. These associated symptoms may be due to immune complexes consisting of hepatitis B surface antigen and its antibody. The role of cellular immunity in hepatitis B is unknown. The relation between type B virus and the liver is both destructive (leading to severe acute hepatic disease and eventually to cirrhosis) and symbiotic (existing among carriers who have neither liver disease nor symptoms). If the factors that cause these divergent courses were delineated and understood, the results may lead to the prevention and cure of hepatitis B and its sequelae.