Background and Objective: HBeAg-positive chronic hepatitis B patients have high serum HBV DNA level showing high viral replication. Goal of treatment of hepatitis B is to prevent cirrhosis, hepatic failure and hepatocellular carcinoma by serum alanine transaminase (ALT) normalization, decrease in serum hepatitis B virus (HBV) deoxyribonucleic acid (DNA) and loss in hepatitis B e antigen (HBeAg). Interferons (IFNs) have antiviral, anti-proliferative, and immunomodulatory effects. IFN-α is effective in suppressing HBV replication and in inducing remission of liver disease. Materials and Methods: In this prospective, single treatment arm study, HBeAg-positive chronic hepatitis patients without decompensated liver disease were enrolled to receive indigenous recombinant IFN-α 2b in the dose of 5 MU daily for 6 days a week subcutaneously for 16 weeks. Quantitative HBV-DNA, HBeAg, and hepatitis B surface antigen (HBsAg) were assessed at baseline and at the end of treatment. ALT level assessment was done at baseline and during therapy at week 1, week 2, week 8, week 12, and week 16. Results: Out of 37 patients enrolled in the study, 8 patients (21.62%) did not complete study due to lost to follow-up (3 patients), discontinuation due to adverse event (3 patients), and consent withdrawal (2 patients). Among 29 patients who completed the study, 10 patients (34.48%) had clearance of HBeAg and 1 patient (3.44%) had lost HBsAg after 16 weeks of therapy. Mean ALT level started decreasing after 4 weeks of therapy but did not come to normal range till 16 weeks of therapy. At least 2 log decreases in HBV DNA was observed in 9 (31.03%) patients and at least 1 log decrease in 18 (62.06%) patients. Overall decline in HBV DNA level was observed in 62% patients after 16 weeks of therapy. Conclusion: IFN-α treatment does result in HBeAg and HBsAg loss and decreases HBV-DNA levels in chronic hepatitis B patients. Most of adverse events were mild to moderate in intensity. So, interferon-α therapy was well tolerated, safe, and efficacious to treat HBeAg-positive chronic hepatitis B patients without decompensated liver disease.