Seroconversion of hepatitis B e antigen (HBeAg) is an important marker for resolution of active hepatitis B virus (HBV) infection and for a long-term positive response to treatment. Lamivudine, a nucleoside analogue, is the first effective oral treatment for chronic hepatitis B in patients with evidence of viral replication and liver disease. When appropriate patient groups are compared, treatment with lamivudine for 1 year leads to HBeAg seroconversion in a similar proportion of patients as a standard course of interferon (IFN) alpha therapy. Seroconversion increases during prolonged therapy (up to 3 years), and is sustained post-treatment in more than three-quarters of patients. Response rates are related to the pretreatment level of serum alanine aminotransferase (ALT) and reach 65% in those patients with serum ALT > 5 x upper limit of normal (ULN) after one year. For patients with pretreatment ALT > 2 x ULN, response was seen in 38% after one year, rising to 65% after 3 years. To date, combination with IFN and lamivudine has not been shown to confer additional benefit compared with lamivudine monotherapy. Lamivudine is effective and appropriate for use in a greater proportion of HBV infected patients than IFN alpha, particularly those infected at birth or in early childhood. Furthermore, because seroconversion after lamivudine is not normally associated with a severe flare of liver disease, as seen with IFN, it is more suitable for use in patients with active liver disease and cirrhosis. In conclusion, lamivudine is more suitable than IFN for a broad range of patients, including those with severe liver disease, recurrent flares, pre-core mutant HBV and those who have failed previously IFN treatment or are immunosuppressed. Lamivudine is also better tolerated than IFN.