Light and electron microscope finding from a liver of a chronic carrier of hepatitis B surface antigen (HBsAg) showed small lymphocytes and macrophages in close contact with liver cells, partial lysis of variable degrees, lytic necrosis, and the complete loss of a few hepatocytes with HBsAg in the cytoplasm. On the basis of these findings, together with the results from immunofluorescence study, the pathogenesis of hepatitis B is discussed, with emphasis on the importance of host cellular immune response. The cytopathic and cytolytic activities of immunologically activated T lymphocytes against liver cells that have antigenic targets associated with HBsAg at their surface and in the cytoplasm are discussed.