One year of lamivudine treatment results in increased hepatitis B e antigen (HBeAg) seroconversion and serum hepatitis B virus (HBV) DNA negativity in children with chronic hepatitis B and high serum alanine aminotransferase concentrations. Two hundred seventy-six children who participated in a 1-year randomized, placebo-controlled study of lamivudine were enrolled in a 24-month, open-label extension. Patients were stratified into two groups based on HBeAg status at week 48 of the previous study: 213 HBeAg-positive children were entered into a treatment arm, and 63 HBeAg-negative children were entered into an observation arm to evaluate durability of HBeAg loss. In the treatment arm, 28 of 133 (21%) children previously treated with lamivudine and 23 of 77 (30%) children who previously received placebo achieved the primary end point: virological response (VR) (HBeAg loss and HBV DNA negativity) at month 24. The incidence of YMDD (tyrosine, methionine, aspartate, aspartate) mutations at month 24 was 64% (66/103) in the children previously treated with lamivudine and 49% (34/70) in those previously treated with placebo. The incidence of VR at month 24 was 5% (5/100) for patients with YMDD mutant HBV and 54% (39/72) for patients without. The durability of response in the observation arm was 89% (48/54) at month 24. In conclusion, further clinical response was seen over the 24-month open-label study period in children who had not initially achieved a VR after 12 months of lamivudine treatment. However, the incidence of YMMD mutations increased over time and resulted in lower response rates. VR was maintained in most patients who had initially responded to lamivudine in the first 12 months.