Serial HBs Ag determinations were performed on 98 renal allograft recipients with functioning grafts for 6 to 108 months, 85 of whom were followed from the initiation of dialysis. Twenty-six (27%) recipients had HBs antigenemia following transplantation. Thirteen (50%) of the 26 recipients were HBs Ag positive during the period of dialysis and 13 developed HBs antigenemia 1 to 44 months following transplantation. Seventeen (65%) of the 26 HBs Ag positive patients had hepatic dysfunction which was detected by biochemical surveillance and not associated with clinical symptomatology. There was no evidence of progressive hepatic insufficiency. HBs Ag persisted in 24 (92%) recipients for 6 to 49 months. Clearing of antigenemia occurred in only two patients, both of whom ultimately rejected their grafts. The presence of HBs Ag had no adverse effect on graft function. Temporary reduction in azathioprine dosage with hepatic dysfunction was not associated with rejection episodes. The major hazard posed by the HBs Ag positive recipient is the potential reservoir for spread to the general population because of the persistence of antigenemia.