Chronic hepatitis B virus infection is a major medical problem worldwide. Apart from HBsAg carriers, hepatitis B virus has also been identified in some HBsAg-individuals with or without antibodies to viral antigens. The molecular mechanisms underlying hepatitis B virus persistence in HBsAg-individuals are unresolved, however. To identify a possible genetic basis for viral persistence, we cloned the viral genome from the liver of a patient serologically immune to hepatitis B virus infection. DNA sequence analysis of the complete viral genome identified numerous mutations in all viral genes. Analysis of the biological effects of these mutations revealed three major findings: a low level of HBsAg synthesis, absence of HBeAg production and a defect terminating viral replication. These data suggest that mutations accumulating during the natural course of hepatitis B virus infection may be a mechanism underlying viral persistence in HBsAgindividuals, presumably through escape from immune surveillance. (HEPATOLOGY 1991; 14:56-62.) Chronic HBV infection and its sequelae are major medical problems throughout the world. Apart from HBsAg-t individuals, HBV DNA species have also been detected in serum or liver from some HBsAg -patients and experimental animals with or without antibodies to viral antigens (1-11). The molecular structure and biology of these viral DNA species have not been characterized in detail, however. Recently, mutations have been identified in the surface (12-14) and precorelcore regions (15-24) of the viral genome, respectively. In clinical terms, some of these mutations were shown to result in inefficiency of HBV vaccination (13)