OBJECTIVE Hepatitis B virus (HBV) and HIV infections share risk-factors; therefore coinfection is common. Interactions have been reported but controlled studies have been limited. Our objective was to study the effect of HIV infection on the natural history of chronic HBV infection and the reverse effect of the HBV carrier state on HIV infection. METHODS Prospective observational cohort study. METHODS Open-access outpatient HIV/genitourinary medicine clinic at a Central London hospital. METHODS Total of 152 untreated homosexual male HBV carriers and 212 HBV surface antigen-negative controls (41.4 and 70.3% HIV-seropositive, respectively). METHODS The rate of loss of serum HBV e antigen (HBeAg) and its reappearance in HIV-infected and HIV-uninfected HBV carriers; serum HBV DNA levels measured by dot-blot hybridization assay), HBV DNA polymerase activity and liver transaminase activities, the progression of HIV infection to symptomatic disease or AIDS in HIV-infected compared with HBV-HIV coinfected patients. RESULTS In HIV-infected HBV carriers, serum HBV DNA polymerase activity was higher, alanine aminotransferase was lower and loss of serum HBeAg (mean follow-up, 2.8 years) occurred at a lower rate when compared with HIV-uninfected HBV carriers (estimated relative hazard, 0.39; 95% confidence interval, 0.161-0.942) Concomitant chronic HBV infection had no detectable effect on the rate of progression of HIV disease after correction for lead-time bias. CONCLUSIONS This study strengthens the evidence for a significant effect of HIV infection on the natural history of chronic HBV infection, which by prolonging the period of infectivity could have an important impact on the epidemiology of HBV infection in regions, or patient groups, with high HIV seroprevalence. There was no evidence of an important effect of HBV carriage on HIV disease progression.