Chronic hepatitis B virus (HBV) infection affects over 350 million people worldwide and over 1 million die annually of HBV-related chronic liver disease. Although many individuals eventually achieve a state of nonreplicative infection, the prolonged immunologic response to infection leads to the development of cirrhosis, liver failure, or hepatocellular carcinoma (HCC) in up to 40% of patients. In endemic areas, where carrier rates are >5%, most individuals are infected perinatally, by vertical transmission, or in early childhood. In the United States, where prevalence is low except in particular areas and populations (e.g., Alaskan natives, immigrants from highly endemic areas), transmission is generally horizontal, percutaneous, or via sexual contact in adulthood. A variety of host (age at infection, gender, immune status); viral (viral load, genotype, mutation); and external (concurrent viral infections, alcohol consumption, chemotherapy) factors influence disease progression. Several variables (age at infection, gender, ethnicity, immune status) also influence the risk of chronic infection. Perinatal transmission, the most common mode of infection worldwide, can be reduced by appropriate prophylaxis (vaccination of the infant at birth together with hepatitis B immune globulin); anti-viral therapy in late pregnancy may also be beneficial. Five drugs are now FDA-approved for the treatment of HBV (interferon, lamivudine, adefovir, entecavir, and peginterferon alfa-2a), and suppressive anti-viral therapy improves the natural history of HBV. Patients with decompensated cirrhosis or HCC are highly likely to die unless they successfully undergo liver transplantation. While novel anti-viral drugs have improved the management of cirrhosis, strategies to prevent and treat HCC remain inadequate.