Treatment of HBV infection with nucleic acid polymers and pegIFN is accompanied by transaminase elevations in 95% of participants. HBV viral rebound, partial cure (HBV DNA < 2000 IU/mL, normal ALT) or functional cure (HBV DNA target not detected, HBsAg 3X ULN while HBsAg was <1 IU/mL occurred in 3/11 (27%), 11/15 (74%) and 14/14 (100%) of participants experiencing viral rebound, partial or functional cure. ALT elevation >3X ULN during HBsAg <1 IU/mL and <10 IU/mL were the best predictors of partial and functional cure. In conclusion, elevations in ALT, AST or GGT while HBsAg <10 IU/ml during therapy with REP 2139 + pegIFN are associated with partial and functional cure. More potent HBsAg reduction during flare nadir is associated with the establishment of functional cure, suggesting a critical role for HBsAg-specific immunity to achieve this outcome. These on-therapy milestones may have similar positive prognostic value with other combination therapies.