Chronic hepatitis B progresses across a spectrum of asymptomatic carriers, active hepatitis, and liver cirrhosis. With more advanced disease stage, the risk for developing hepatocellular carcinoma (HCC) becomes higher. Recent studies suggest that this progressive risk may reflect an accumulation of multistage genetic mutations in the chromosomes of affected hepatocytes. Mutations of the known candidate genes such as p53 and beta-catenin have been found. Recent genome-wide analysis of HCC chromosomes by comparative genomic hybridization or loss of heterozygosity have identified more new loci implicated in hepatocarcinogenesis. Persistent hepatitis B is essential for inducing these mutations through immune-mediated injuries of the hepatocytes and the resulting hyperplasia. Prevention of hepatitis B by active immunization effectively interrupts persistent viral infections in children and subsequently reduces the risk of childhood HCC. Treatment for chronic hepatitis B by interferon or antiviral analogues can control hepatitis B activity, but its effect on controlling HCC remains to be seen. Insights for the hepatocarcinogenesis process should come from a multidisciplinary collaboration to explore important viral and host genes so that new approaches to diagnosis and treatment can be developed.