In a previously reported randomized controlled trial of interferon-alpha (IFN-alpha) for chronic hepatitis B, we found a significant difference in response between Chinese adults with elevated vs normal pretreatment aminotransferase (ALT) levels. The aim of this study was to determine the correlation between serum hepatitis B virus (HBV) DNA levels and response to IFN therapy. HBV DNA levels in residual stored sera from patients who participated in the above trial were quantified by a branched DNA (bDNA) assay. Nominal logistic regression was used to estimate the probability of response to IFN treatment as a function of pretreatment ALT and/or HBV DNA levels. We found a significant (P < 0.01) correlation between the HBV DNA levels at midtreatment and response to IFN therapy. Response was achieved in 53% of patients who had undetectable HBV DNA levels at midtreatment but in only 17% of those who remained HBV DNA positive (P < 0.01). In contrast, the probabilities of response for patients with baseline HBV DNA levels over the range 10 to 10000 million equivalents (MEq) ml-1 were almost identical. We also found a significant correlation between the pretreatment ALT levels and response to IFN therapy. The probabilities of response for patients with pretreatment ALT levels of 500 and 100 IU l-1 were higher than for patients with normal ALT levels by two and onefold, respectively. Our findings may help to improve the cost-effectiveness of IFN therapy for chronic hepatitis B by guiding the selection of patients for therapy and in optimizing the duration of treatment for the individual patient.