To evaluate the efficacy of y-interferon (IFN) on the chronic type B hepatitis, a controlled trial of y-IFN was performed in 19 patients with biopsy proven chronic type B hepatitis (CAH 17, CPH 2). Control group was 28 patients with chronic type B hepatitis (CAH 27, CPH 1) who received no therapy during the same periods. HBeAg, HBV-DNA titiers and serum ALT were tested every 1 month for average 8 months. In treated groups, mean serum ALT dropped from pretreatment level of 160 +- 132 U/L to posttreat- ment level of 112+- 100 U,/L, but no significant difference was observed. HBV-DNA became negative in 8 cases (42.1%) of treated group and 9 case (32.1%) of control group. Seroconversion of HBeAg was observed in 3 cases (15.7%) of treated group and in 1 case (7.1%) of control group. There was no significant difference in disappearances HBeAg between treated and control group. Side effects such as fever (84%), headache and anorexia were noted during y-IFN therapy. Our results suggest that recombinant y-IFN therapy is safe and somewhat effective in reducing Hepatitis B virus replication, but its effectiveness on seroconversion of HBeAg is not significant.