Remarkable progress has been made in our understanding of the natural history of chronic hepatitis B virus (HBV) infection in the past 25 years. Availability of sensitive HBV DNA assays and application of sophisticated immunological techniques led to the recognition that HBV replication persists throughout the course of chronic HBV infection, and host immune response plays a pivotal role in HBV-related liver disease. Knowledge of the HBV genome organization and replication cycle led to the unraveling of HBV genotypes and molecular variants, which contribute to the heterogeneity in outcome of chronic HBV infection. The natural course of chronic HBV infection is now perceived as consisting of 4 phases: immune tolerance, immune clearance [hepatitis B e antigen (HBeAg)-positive chronic hepatitis], inactive carrier state, and reactivation (HBeAg-negative chronic hepatitis B). Understanding the dynamic nature of chronic HBV infection is crucial in the management of HBV carriers and underscores the need for long-term monitoring. Accumulating evidence indicates that antiviral therapy can prevent progression of HBV-related liver disease, particularly among patients with sustained response. Newer antiviral therapies with improved efficacy and decreased risk of resistance may lead to a complete revision of the chapter on the natural history of chronic HBV infection on the occasion of the golden jubilee of HEPATOLOGY.