Clustering of hepatitis B surface antigen (HBsAg) with both subtypes adr and adw in three families of patients with chronic liver diseases or hepatocellular carcinoma was demonstrated in Taiwan where adw is the main subtype. The subtype in the children was similar to that in their mothers, suggesting maternal transmission. In all the family units clustered with different subtypes, the same pattern occurred, invariably with fathers carrying HBsAg/adr and the children carrying HBsAg/adw. The subtype difference clearly rules out the transmission of hepatitis B virus (HBV) from father. Horizontal infection with the locally dominant adw-subtyped HBV in the children of fathers carrying HBsAg/adr explains the discrepancy of the subtypes in these families. Clustering of two HBsAg-positive brothers with hepatocellular carcinoma in one of the families was found. That both adr-subtyped and adw-subtyped HBV are capable of inducing chronic active hepatitis in another family suggests that host factors are probably more important in determining the clinical course of HBV infection.