Chronic hepatitis B affects 400 million people worldwide and up to 30% will die either of decompensated cirrhosis or hepatocellular carcinoma. During the HBe antigen positive and negative viraemic phases, when viral levels are > 105 IU/ml, the patient may develop progressive hepatitis and fibrosis. In these phases, when patients have chronic hepatitis with some degree of hepatic fibrosis, a trial of up to 12 months pegylated interferon is indicated. In those not undergoing sustained HBV DNA suppression maintained after cessation of this therapy, long term treatment with nucleoside analogues is indicated until HBV DNA is no longer detectable by sensitive polymerase chain reaction (PCR) assays and liver function tests return to normal. Some patients with high pre-treatment levels of viraemia or failure to achieve negative HBV DNA levels on monotherapy, may need combination antiviral therapy. Patients with cirrhosis should not have a trial of interferon but should start on nucleoside therapy. Patients with chronic hepatitis B are at risk of developing hepatocellular carcinoma and older patients should be screened at 6 monthly intervals by ultrasound.