To study the morphologic interrelation of hepatocytes with the replication of hepatitis B vius (HBV) and immunocompetent cells in chronic active liver disease(CALD), organ cultures were prepared from liver biopsy specimens. Replication of hepatitis B core antigen (HBcAg) appears to occur in the nucleus of the hepatocyte in close association with intranuclear electron-dense strands and sometimes intranucleolar matrixes (likely HBcAg genomes), and cytoplasmic maturation of the HBcAg takes place in the preautolytic condition of host hepatocytes. Immunocompetent cells became progressively autolyzed in the early period of cultures. No difference in progression of hepatocyte injury in tissues from normal subjects and from hepatitis B surface antigen (HBsAg)-positive and HBsAg-negative patients with CALD may suggest that intracellular synthesis of HBV alone is not cytopathic to host hepatocytes. This model is promising for the study of HBV replication and development, and also for testing the efficacy of new antiviral agents against the virus.