We have studied serum and tissue markers of viral replication in 39 patients with chronic hepatitis B virus (HBV) infection and correlated these with periportal and lobular activity in liver biopsies. HBV DNA positivity correlated with the presence of hepatitis B e antigen (HBeAg, P less than 0.001) and aspartate transaminase (AST) levels (P less than 0.005). The lobular but not the periportal inflammatory activity was significantly associated with the presence of HBV DNA (P less than 0.02) and HBeAg (P less than 0.001) and with higher AST levels. The periportal activity correlated with the periportal and lobular display of beta 2-microglobulin on hepatocytes (P less than 0.001 and P less than 0.002, respectively). In patients with chronic HBV infection therefore, the lobular rather than the periportal component of activity was related to viral replication. The association of display of beta 2-microglobulin on hepatocytes with the inflammatory process, in patients with active viral replication, is consistent with the hypothesis that increased display of HLA type I enhances recognition of hepatocytes bearing viral proteins and allows lysis of immune cells.