Infection of man and chimpanzees with the hepatitis B virus (HBV) is associated with diffuse hepatocellular infection and variable manifestations of disease which may not only reflect the character of the host immune response, but also depend upon differences in the cellular biology of this minimally cytopathic or noncytopathic agent. The presence of hepatocellular injury and the course of disease do not appear to be related to the presence of viral antigens in hepatocytes or to the specific pattern of genome expression. HBV infection is typically associated with both humoral and cellular immune responses to viral and hepatocellular antigens. Whereas cellular effector systems may be responsible for immunologically mediated hepatocellular injury, the patterns of viral antigen synthesis and expression may be modulated by the humoral immune response. Aberration of lymphocyte function occurs during acute hepatitis type B. Thymus-derived lymphocyte function is abnormal and is associated with persistent humoral suppression of T lymphocyte function during the development of the chronic carrier state. Extrahepatic disease appears attributable to the formation and deposition of HBS Ag-antibody complexes. Current information of the biology and immunology of HBV and other viruses has been integrated into a hypothesis to explain the pathogenesis of injury and events associated with persistent infection. Hepatocellular injury and persistence of viral synthesis may be determined by the regulation of synthesis and hepatocyte surface expression of viral and cellular antigens as well as by the specificity and character of the host immune response. Termination of HBV infection is viewed as suppression of viral genome rather than eradication of infected cells.