OBJECTIVE Viral breakthrough has been considered a major limitation of lamivudine in the treatment of hepatitis B virus related chronic liver disease. Its clinical meaning has not been thoroughly assessed. METHODS 64 patients who showed viral breakthrough during lamivudine treatment were retrospectively reviewed. We evaluated the rate of HBeAg seroconversion and hepatic decompensation after viral breakthrough. RESULTS After viral breakthrough, serum alanine transaminase (ALT) elevation more than 1.2 x upper limit of normal (ULN) was noticed in 40 patients (62.5%). Acute flare (serum ALT elevation > x 5 ULN, or serum bilirubin >3 mg/dL) occurred in 15 patients (23.4%). During the period of follow up (15.0 +/- 9.7 months; range, 0-31 months) since viral breakthrough, decreased serum HBV-DNA level to below the detection limit and serum ALT normalization was seen in 15 patients (23.4%). HBeAg seroconversion was noticed in 7 (13.7%) of a total of 51 HBeAg positive patients at base line; in 4 (15.4%) of 26 patients with non-hepatic failure (chronic hepatitis or Child-Pugh class A liver cirrhosis) at base line; and in 2 (40.0%) of 5 patients with non-hepatic failure at base line and acute flare after viral breakthrough. During this period, terminal hepatic decompensation (Child-Pugh class C) or death was noticed in 9 (90.0%) of 10 patients who had hepatic decompensation (Child-Pugh class B or C) at baseline and acute flare after viral breakthrough. CONCLUSIONS Acute flare after viral breakthrough seemed to continue during HBeAg seroconversion and rarely developed into terminal hepatic decompensation or death in patients with non-hepatic decompensation at baseline. Its incidence is not only high but lethal to most patients with hepatic decompensation at baseline.