The clearance of HBV-infected cells from the liver is probably dependent on an interplay between the interferon system and the cellular limb of the host immune response. Although the importance of the nucleocapsid proteins as targets for sensitized cytotoxic T cells is established in chronic HBV infection, further studies are needed during the early phase of acute HBV infection. The relative importance of pre S sequences as inducers and targets of the virus neutralizing humoral immune response is becoming established, but their precise place will await the development of in vitro models of hepadnavirus infection and precise definition of the mechanism of viral uptake. Our understanding of the mechanisms underlying the development of chronic HBV infection is still incomplete. When this occurs in adult life, deficient production of alpha interferon and suppression of the ability of the host to respond to interferon are probably important factors, and the role of suppression of the humoral response remains to be determined. In the neonate, specific suppression of the cell-mediated immune response, perhaps because of exposure to soluble HBe antigen or to modulating quantities of maternally derived antinucleocapsid antibodies at a time when the immune system is "immature," may be involved. In each of these postulated mechanisms the virus has neutralized one important host defense. Increasing the response rate to therapy with interferon or synthetic antiviral compounds will depend on identifying the cause in each patient and devising specific therapies to reverse the host-virus balance in favor of the host defenses.