Pretrial and posttrial liver biopsy samples from 124 adult patients who participated in two randomized, controlled trials of interferon alfa therapy for chronic hepatitis B virus (HBV) infection were analyzed to determine the effects of interferon on the replication of HBV in the liver. Replicative forms of HBV DNA were detected in the pretrial biopsy samples from all and posttrial biopsy samples from 74% treated patients and 86% controls. Replicative forms of HBV DNA were detected in the posttrial biopsy samples from all patients who remained positive for hepatitis B e antigen and HBV DNA in the serum, in 77% treated patients and 80% controls who cleared HBV DNA in the serum but who remained positive for hepatitis B e antigen, but in only 19% treated patients and 40% controls who cleared HBV DNA as well as hepatitis B e antigen in the serum. Serum alanine aminotransferase levels were significantly lower in patients whose posttrial biopsies did not contain replicative forms of HBV DNA. In summary, we demonstrated that in most patients with chronic HBV infection treated with interferon alfa, serological response was associated with the disappearance of replicative forms of HBV DNA in the liver.