Steroid withdrawal followed by interferon therapy is an alternative approach for treating chronic hepatitis B virus infection when there has been no therapeutic response to interferon alone. The effectiveness of steroid withdrawal followed by interferon therapy and factors predictive of the response were evaluated in 35 children with biopsy-proven chronic hepatitis B. Patients had received a 1-month course of prednisolone, 1 mg/kg per day orally, followed by a 2-week rest, and then were treated with interferon alpha 3 MU three times per week for 4-6 months. The serum aminotransferase values normalized in 80%, and negative seroconversion rates of HBeAg and HBV-DNA were 69% and 66%. The good response rate was associated with a pretreatment HBV-DNA level lower than 100 pg/ml and a posttreatment ALT level more than 200 IU/L. Normalization of ALT values usually took 5 months, and the clearance of HBV-DNA and HBeAg took 7.8 and 6.7 months, respectively. These results suggest that steroid withdrawal followed by interferon therapy is useful in the treatment of chronic hepatitis B in children, and that a good response rate can be expected in children with lower pretreatment HBV-DNA levels (< 100 pg/ml).