Serum hepatitis B virus (HBV) DNA from 4 infants with fulminant hepatitis B, 3 infants with acute self-limited hepatitis B, and 15 infants with chronic HBV infection were amplified by polymerase chain reaction followed by direct sequencing of the region of HBV genome encoding the major antigenic epitopes of hepatitis B surface antigen (HBsAg). All infants were born to carrier mothers and administered immunoprophylaxis from birth. Serum HBV DNA from 13 carrier children born to carrier mothers who did not receive immunoprophylaxis and had comparable length of infection were studied as controls. An S mutant (residue 126, Thr to Ala) initially found in an infant with fulminant hepatitis was replaced by another S mutant (residue 145, Gly to Arg) 4 days later. In a girl with chronic hepatitis B, Ala-126 variant and Arg-145 variant were found at 17 and 25 months of age, respectively. The Arg-145 variant persisted for 8 years in an asymptomatic male carrier and for 1 year in an infant with chronic hepatitis B. The Ala-126 variant persisted for 11 years in one child who had an early loss of hepatitis B e antigen. In the majority of the infants' mothers, corresponding mutations in HBsAg were not detected in serum by direct sequencing. The S mutants detected in three carrier infants were not found in their mothers' serum after cloning and sequencing of 10 DNA clones from each maternal sample. None of the 13 control patients had detectable S mutants. These results suggest that S variants emerge or are selected under the immune pressure generated by the host or by administration of hepatitis B immune globulin and hepatitis B vaccination. An S mutant (residue 129, Gln to Arg) found in one mother-infant pair suggested a direct maternal-infant transmission, resulting in immunoprophylaxis failure. None of the family members of children infected with Arg-145 variant had the same variant infection, implying this variant's low transmissability.