The expression of hepatitis B virus antigens was studied by double staining liver tissue with appropriate antisera and correlated with serum hepatitis B viral DNA and histology in 28 patients with disease related to chronic hepatitis B virus infection. The cellular localization of hepatitis B core and hepatitis B e antigens generally coincided, but there were important differences at a subcellular level. Thus, hepatitis B e antigen was detected in nuclei and/or cytoplasm but strong cytoplasmic hepatitis B e antigen was associated with a high serum hepatitis B viral DNA (P = 0.0017) but not with active liver disease. Hepatitis B core antigen could also be detected in nuclei and/or cytoplasm, but strong cytoplasmic hepatitis B core antigen expression, exceeding that of hepatitis B e antigen, was associated with active liver disease (P = 0.041) and not with serum hepatitis B virus DNA. The proportion of hepatocytes expressing hepatitis B surface antigen correlated inversely with the serum titer (P = 0.0017), whereas hepatitis B surface and nucleocapsid antigens were usually expressed independently. The data support the hypothesis that cytoplasmic hepatitis B core antigen and not hepatitis B e antigen is the target for immune system-mediated cytolysis of hepatocytes. Cytoplasmic hepatitis B e antigen is not associated with liver damage but is instead associated with high levels of hepatitis B virus replication.