46 male chronic hepatitis B virus (HBV) carriers with active viral replication were randomised, with stratification for histology and sexual preference, to receive six months' lymphoblastoid interferon or no therapy. After nine to eighteen months' follow-up, HBeAg was no longer detectable and anti-HBe was present in 6 of the 23 treated patients. HBsAg was not detectable in 5 of these patients and 3 had anti-HBs. All of the controls remained positive for HBeAg and HBsAg. Seroconversion from HBeAg to anti-HBe was preceded in all cases by a pronounced increase in serum aspartate aminotransferase levels of more than ten times the upper limit of normal at eight to twelve weeks; this response was exclusively associated with interferon therapy. These results suggest that loss of HBsAg and a hepatitis-like illness in the third month of therapy are direct effects of interferon treatment.