To evaluate the histologic effects of interferon-alpha (IFN alpha) therapy on chronic hepatitis B virus (HBV) infection, a semiquantitative study using a modified Knodell's numeric histologic scoring system was performed on paired pre- and post-treatment liver biopsy specimens from 127 adult Chinese patients from two trials of IFN alpha therapy (IFN alpha, n = 86; control, n = 41). The effects of IFN alpha therapy on the hepatic expression of HBV antigens were also determined using immunohistochemical analysis. Serologic response with clearance of HBV e antigen (n = 18) was associated with reduction in lobular activity, periportal piecemeal necrosis, portal inflammation, and total histologic scores. Loss of HBV e antigen also was associated with a reduction in the amount of HBV core antigen in the hepatocytes. In contrast, there was an increase in hepatic expression of HBV surface antigen after IFN alpha therapy. Patients who lost HBV e antigen with IFN alpha therapy were characterized by more severe initial periportal piecemeal necrosis before treatment. These data indicate that (1) serologic response is associated with a reduction in hepatic HBV replication and an improvement in hepatic histology, and (2) patients with severe periportal piecemeal necrosis respond more favorably to IFN alpha therapy.