The polymerase chain reaction (PCR) and DNA sequencing were used to examine genomic variation in the pre-core/core open reading frame of the hepatitis B virus (HBV) in chronically infected patients. Gel electrophoresis of amplification products showed the presence of shortened forms of the core gene in addition to the full length product. These shortened forms were seen only in patients with chronic active hepatitis (CAH) seropositive for HBeAg and not in patients with chronic persistent hepatitis (CPH) or HBeAg minus CAH. Cloning and DNA sequencing revealed the presence of a number of overlapping deletions within the core gene, the majority being in-frame, which were clustered within aa 81-114 of the core gene product. These deletions were found in patients with CAH from different racial and geographical backgrounds, whereas PCR analysis of the surface and X open reading frames showed no shortened forms suggesting deletions to be specific to the core gene in these patients. Because the product of the core gene--the HBV core antigen--is believed to be the major target for T-cell-mediated liver damage, it seems likely that the products of core genes carrying deletions will alter immune recognition and may be of importance in the progression of inflammatory liver damage.