To determine the incidence of infections with hepatitis B virus (HBV) among Chinese preschool children, 1,510 children (mean age, 29 months) were tested for HBV markers; 15.9% were infected with HBV (7.8% positive for hepatitis B surface antigen [HBsAg] and 8.1% positive for antibody to HBsAg) and 84.1% were susceptible when the children were enrolled in the study. The average length of follow-up was 2.1 years among 1,110 children. Among the 924 susceptible children who were followed up, 10.6% had seroconversions for HBV markers, none of which was associated with clinical illness; the annual incidence of HBV infections was 5.0%. Among the 98 children who experienced HBV infections during the study, 23% became HBsAg carriers, and HBsAg persistence was age-related, with most carriers being among the youngest children infected. In contrast, among the children with HBV markers at the time of enrollment, 118 (49.2%) were HBsAg-positive and 86% were still positive on follow-up. The incidence of HBV infections was significantly associated with the frequency of previous injections.