All patients who test positive for hepatitis B virus (HBV) surface antigen (HBsAg) should be evaluated to determine the activity and severity of the infection. Assessment includes tests of disease activity (aspartate transaminase, alanine aminotransferase), tests of liver function (bilirubin, albumin, prothrombin time), and tests of replication status (hepatitis B early antigen, antibody to HBe, HBV DNA titer, and hepatitis D virus antibody). An ultrasound is recommended to assess for signs of cirrhosis and to exclude focal lesions in the liver. In patients with abnormal liver enzyme levels (aspartate aminotransferase, alanine aminotransferase), a liver biopsy is recommended to assess the stage of disease (amount of fibrosis) and to determine the urgency and need for antiviral therapy. Interferon alfa and lamivudine are the two antiviral therapies currently available. There are pros and cons associated with the use of either drug. Individualization of therapy, based upon factors such as patient comorbidities, response to prior therapies, and stage of disease, is recommended. Patients with abnormal liver enzyme levels, indices of active viral replication (positive HBV DNA, with or without positive HBeAg), and compensated liver disease are candidates for treatment with interferon or lamivudine. For patients with abnormal liver enzyme levels, indices of active viral replication (positive HBV DNA, with or without positive HBeAg), and decompensated liver disease, the treatment of choice is lamivudine. Concurrently, these patients should be considered for liver transplantation referral. There are a number of new antiviral agents currently under evaluation in clinical trials. Combination therapy for chronic HBV infection is anticipated. The use of two or more anti-HBV drugs can be expected to enhance efficacy and reduce the likelihood of drug resistance.