The natural history of chronic hepatitis B patients who spontaneously cleared serum HBsAg was investigated. A total of 351 patients with chronic hepatitis B were observed in our hospital for at least 3 yr. Seven of these patients became HBsAg negative during the follow-up period. HBsAg disappeared within 6 mo (range = 11 to 169 days, mean = 70 days) after acute elevation of ALT. ALT levels as high as 500 IU were found in three patients, whereas such elevation was not demonstrated in the other four patients. After the disappearance of HBsAg, ALT levels returned to normal in all patients. With one exception, all patients seroconverted to antibody to HBsAg; however, hepatitis B virus DNA remained detectable in serum using the polymerase chain reaction in five patients. The titer of percent inhibition of antibody to HBcAg gradually decreased to less than 70% when a 1:200 dilution of the serum of six patients was used. Four of the patients had active liver disease develop: two had chronic active hepatitis and two had cirrhosis. Three of these four patients subsequently had hepatocellular carcinoma develop. These findings suggest that patients may suffer complications of chronic hepatitis even after normalization of transaminase activities and after the clearance of HBsAg. Thus hepatitis B virus should be considered as a possible factor associated with hepatocellular carcinoma even in the absence of HBsAg, particularly if serum hepatitis B virus DNA persists.