The function of the hepatitis B e antigen (HBeAg) is largely unknown because it is not required for viral assembly, replication, or infection. In this report we chronicle clinical and experimental studies in an attempt to understand the role of HBeAg in natural infection. These studies largely have focused on clinical-pathologic features of HBeAg-negative variants in acute and chronic HBV infection, mutational analysis in animal models of hepadnavirus infection, and the use of transgenic murine models. The clinical and experimental data suggest that serum HBeAg may serve an immunoregulatory role in natural infection. To the contrary, cytosolic HBeAg serves as a target for the inflammatory immune response. These dual roles of the HBeAg and its ability to activate or tolerize T cells show the complexity of the interactions between the HBeAg and the host during HBV infection.