Hepatitis flares or acute exacerbations, defined as an abrupt elevation of serum alanine aminotransferase (ALT) over fivefold the upper limit of normal (ULN), of chronic hepatitis B virus (HBV) infection are the results of HLA-I restricted, cytotoxic T lymphocyte (CTL)-mediated immune response against HBV and its downstream mechanisms. Higher ALT levels reflect a more vigorous immune response and a more extensive hepatolysis that, in the extreme situation, may lead to decompensation and failure. In contrast, higher ALT also reflects a more robust immune clearance of HBV and, therefore, a higher chance of HBV-DNA loss and hepatitis B e antigen (HBeAg) seroconversion, both in the setting of natural course and drug therapy. Alanine aminotransferase of fivefold the ULN appears to be a significant cut-off level to categorize the patients in terms of endogenous immune response against HBV. Patients with ALT levels less than fivefold the ULN or those with a less vigorous immune response require immunomodulation to induce robust immune response to enhance HBV clearance. In contrast, those with a more vigorous immune response or those with ALT flare over fivefold the ULN should be monitored closely for spontaneous HBV clearance/HBeAg seroconversion or to start direct antiviral therapy in time to prevent the occurrence or deterioration of hepatic decompensation. In conclusion, a better understanding of the pathogenetic mechanisms and natural course of hepatitis flares, wiser selection of patients and the timing of drug therapy are crucial to achieve better treatment results.