An outbreak of hepatitis B in a residential institution for the mentally retarded was studied. Initially one overt case of hepatitis was noted. A serologic screen of students and employees revealed a total of 12 individuals positive for hepatitis B surface antigen (HBsAg). Subtyping by radioimmunoassay subsequently demonstrated that the population of HBsAg-positive individuals could be subdivided into two groups, based on the HBsAg subtype: adw2 or ayw3. The five individuals with subtype adw2 all were carriers. The ayw3 group, in contrast, were acutely infected except for one carrier with persistent hepatitis B e antigen. Both the ayw3 carrier and several of the acutely infected individuals were aggressive biters. Human biting, a frequent occurrence in the classroom studied, was one probable mode of transmission in this outbreak. The resolution of the outbreak was achieved by rapid screening for HBsAg with subtyping of positive patients and careful observation of the setting for putative modes of transmission.