IgM antibody to hepatitis B core antigen (anti-HBc IgM) was investigated by an antibody-capture radioimmunoassay (serum dilution 1:4000) in serum samples from 31 untreated children with chronic hepatitis B who were followed prospectively for 1-7 years. At the start, all patients were positive for hepatitis B e antigen (HBeAg), and anti-HBc IgM was detected in 23 cases, including 15 out of 16 with chronic active hepatitis and 7 out of 14 with chronic persistent hepatitis. A significant positive correlation was found between anti-HBc IgM levels and severity of liver damage (P less than 0.05), while an inverse relationship was found between anti-HBc IgM levels and distribution of hepatitis B core (HBcAg) antigen in the liver as detected by immunofluorescence. In fact 75% of anti-HBc IgM positive patients showed a focal HBcAg pattern (less than 40% positive nuclei), whereas 87% of antibody negative cases exhibited a diffuse HBcAg expression (more than 60% stained nuclei). During follow-up, seroconversion from HBeAg to anti-HBe with subsequent remission of liver disease occurred in 82% of patients presenting with detectable levels of anti-HBc, including three out of seven cases with chronic persistent hepatitis, but in none of the cases that were initially negative (P less than 0.01). These results indicate that during the natural course of chronic hepatitis B in children, anti-HBc IgM levels in serum reflect the degree of host immune response to infected hepatocytes. The close correlation between anti-HBc IgM seropositivity and seroconversion from HBeAg to anti-HBe suggests that anti HBc IgM may have a prognostic value during the follow-up of children with chronic HBeAg positive hepatitis B.