To elucidate the biologic significance of hepatocyte hepatitis B core antigen (HBcAg) expression and its relation to the natural course of hepatitis B virus (HBV) infection, the patterns of HBcAg were correlated with HBV virus replication state and the disease activity in 598 needle liver biopsies performed on 569 hepatitis B surface antigen (HBsAg) carriers aged 1-81 years. A good correlation of liver HBcAg with serum HBeAg and HBV DNA status was demonstrated. HBcAg was present in the hepatocyte nuclei (nHBcAg) or cytoplasm (cHBcAg), or in both (mixed). Pure nHBcAg was seen mainly in children and young adults; 86% of the patients had non-aggressive disease, but rare cases of chronic active hepatitis (CAH) and HBeAg seroconversion were observed. In contrast, cHBcAg was predominantly associated with CAH (52%) and accompanied by a significantly higher HBeAg seroconversion rate (27%). The HBeAg-negative group, particularly the liver HBcAg-negative subgroup, had a lower frequency of CAH, but an increased incidence of non-aggressive disease as well as cirrhosis and/or hepatocellular carcinoma, indicating that HBeAg seroconversion to anti-HBe does not necessarily mean a favorable prognosis. The results suggest that expression of HBcAg correlates with the liver pathology and the three phases of chronic HBV infection: (1) the early immune tolerance phase is characterized by nHBcAg, mild disease and low HBeAg seroconversion rate; (2) the virus replication/elimination phase by cHBcAg or negative HBcAg, frequent CAH, and high HBeAg seroconversion rate; and (3) the inactive virus replication phase by negative HBcAg and a bipolar disease spectrum.