This paper presents a summary of the evidence review group (ERG) report into the clinical and cost-effectiveness of entecavir for the treatment of chronic hepatitis B (CHB) in adults based upon a review of the manufacturer's submission to the National Institute for Health and Clinical Excellence (NICE) as part of the single technology appraisal (STA) process. The submission's evidence came from five randomised controlled trials (RCTs), of good methodological quality and measuring a range of clinically relevant outcomes, comparing entecavir with lamivudine. After 1 year of treatment entecavir was statistically superior to lamivudine in terms of the proportion of patients achieving hepatitis B virus (HBV) DNA suppression, alanine aminotransferase (ALT) normalisation and histological improvement, but not in terms of the proportion of patients achieving hepatitis B e antigen (HBeAg) seroconversion. The incidence of adverse or serious adverse events was similar for both treatments. The results of the manufacturer's mixed treatment comparison (MTC) model to compare entecavir with the comparator drugs in nucleoside-naive patients were considered to be uncertain because of concerns over its conduct and reporting. For the economic evaluation the manufacturer constructed two Markov state transition models, one in HBeAg-positive and one in HBeAg-negative patients. The modelling approach was considered reasonable subject to some uncertainties and concerns over some of the structural assumptions. In HBeAg-positive patients the base-case incremental cost-effectiveness ratios (ICER) for entecavir compared with lamivudine and pegylated interferon alpha-2a were 14,329 pounds and 8403 pounds per quality-adjusted life-year (QALY) respectively. Entecavir was dominated by telbivudine. In HBeAg-negative patients the base-case ICERs for entecavir compared with lamivudine, pegylated interferon alpha-2a and telbivudine were 13,208 pounds, 7511 pounds and 6907 pounds per QALY respectively. In HBeAg-positive lamivudine-refractory patients entecavir dominated adefovir added to lamivudine. In one-way deterministic sensitivity analysis on all key input parameters for entecavir compared with lamivudine in nucleoside-naive patients, ICERs generally remained under 30,000 pounds per QALY. In probabilistic sensitivity analysis in nucleoside-naive HBeAg-positive patients the probability of the ICER for entecavir being below 20,000 pounds per QALY was 57%, 82% and 45% compared with lamivudine, pegylated interferon alpha-2a and telbivudine respectively. In nucleoside-naive HBeAg-negative patients the probabilities were 90%, 100% and 96% respectively. The manufacturer's lifetime treatment scenario for HBeAg-negative patients and the ERG's 20-year treatment scenario for HBeAg-positive patients increased the ICERs, particularly in the latter case. Amending the HBeAg-negative model so that patients with compensated cirrhosis would also receive lifetime treatment gave probabilities of entecavir being cost-effective at a willingness to pay of 20,000 pounds and 30,000 pounds of 4% and 40% respectively. The NICE guidance issued in August 2008 as a result of the STA states that entecavir is recommended as an option for the treatment of people with chronic HBeAg-positive or HBeAg-negative hepatitis B in whom antiviral treatment is indicated.