The aim of this study was to evaluate the long-term outcome of chronic hepatitis B in 27 children who had increased alanine aminotransferase activity and antibody to hepatitis B e antigen in serum from the time of their first clinical observation. Initial histologic changes were consistent with chronic active hepatitis in 13 cases (three with associated cirrhosis) and with persistent or lobular hepatitis in the remaining cases. On the basis of virologic testing, three groups of patients were identified: (1) two children had hepatitis delta antigen in the liver and anti-delta antibody in serum, and both had severe hepatitis; (2) 10 children had hepatitis B virus DNA in serum, and 60% of them had active hepatitis; (3) 15 patients had no hepatitis B virus DNA, and 33% of them had active hepatitis. During a follow-up period of 12 months to 12 years (mean +/- SD: 6.1 +/- 2.4 years), the disease remained active in both children with anti-delta antibody, but they had no major complaints. In all eight patients who could be followed in group 2, test results became negative for hepatitis B virus DNA and alanine aminotransferase activity normalized within 4 years; biochemical remission was delayed in three patients with higher hepatitis B virus DNA levels on entry, and one of these patients had a severe exacerbation of disease activity before remission. In group 3, a total of 10 patients (71%) achieved biochemical remission within 1 year, and two within 26 months; only two patients, who were transfused at birth, had long-lasting liver damage. These results indicate a trend to early remission of liver disease in children with chronic hepatitis B with antibody to hepatitis B e antigen without delta virus infection. Antiviral therapy aimed at accelerating the termination of hepatitis B virus replication may be indicated only in those with higher levels of hepatitis B virus DNA.