Current therapies for chronic hepatitis B (CHB) have a number of limitations, and better treatment options are needed. Peginterferon alpha-2a (40 kDa) is superior to conventional interferon alpha-2a in the treatment of chronic hepatitis C. This is the first report on peginterferon alpha-2a (40 kDa) in the treatment of CHB. In this phase II study, 194 patients with CHB not previously treated with conventional interferon-alpha were randomized to receive weekly subcutaneous doses of peginterferon alpha-2a (40 kDa) 90, 180 or 270 microg, or conventional interferon alpha-2a 4.5 MIU three times weekly. Twenty-four weeks of therapy were followed by 24 weeks of treatment-free follow-up. All subjects were assessed for loss of hepatitis B e antigen (HBeAg), presence of hepatitis B antibody (anti-HBe), suppression of hepatitis B virus (HBV) DNA, and normalization of serum alanine transaminase (ALT) after follow-up. At the end of follow-up, HBeAg was cleared in 37, 35 and 29% of patients receiving peginterferon alpha-2a (40 kDa) 90, 180 and 270 microg, respectively, compared with 25% of patients on conventional interferon alpha-2a. The combined response (HBeAg loss, HBV DNA suppression, and ALT normalization) of all peginterferon alpha-2a (40 kDa) doses combined was twice that achieved with conventional interferon alpha-2a (24%vs 12%; P = 0.036). All treatment groups were similar with respect to frequency and severity of adverse events. These results indicate that peginterferon alpha-2a (40 kDa) is superior in efficacy to conventional interferon alpha-2a in chronic hepatitis B based on clearance of HBeAg, suppression of HBV DNA, and normalization of ALT.