In 1980, 18 institutionalized children, carriers of hepatitis B virus (HBV), were enrolled into two special education schools, and staff and students were monitored for HBV markers. Eleven HBV exposures were observed and those exposed were given hepatitis B immune globulin. After 3.5 years, no remaining staff showed serological evidence of HBV infection but three of 61 susceptible students did so. The three students probably acquired the infection outside the school. At the conclusion of the project, one school located in the community decided not to institute a vaccine program for students or staff. The other school, located inside the mental retardation institution, established an organized vaccine initiative. Indications for use of hepatitis vaccine in schools should be individualized to accommodate for differences in student and staff interaction, physical design of the school, and number and behaviors of HBsAg carrier students.