There has been very little data recorded on the natural course of chronic hepatitis B virus infection in asymptomatic children. In order to assess the natural course of liver disease in hepatitis B surface antigen (HBsAg) carriers with normal liver tests, 124 such children (81 males, 65.3%) were followed for six to 144 months (mean 36.8 ± 22.8 months). Liver tests and hepatitis B virus (HBV) markers were tested at least every six months. In the beginning, hepatitis B e antigen (HBeAg) was positive in 61 (53%) of the 115 carriers of HBsAg who were tested. Anti-HBe was positive in 51 (44.3%), and both HBeAg antigen and anti-HBe were negative in three (2.7%) carriers. The prevalence of HBeAg was not affected by the patient's age or sex. During follow-up, 11 patients (18%) lost HBeAg (a mean annual clearance rate of 5.8%), and 12 patients (9.7%) lost HBsAg (a mean annual clearance rate of 3.1%). We found no difference in the clearance , of HBsAg and HBeAg by age and sex. The presence of another HBsAg positive person in the family affected HBsAg clearance rate but not HBeAg clearance. Only seven patients (5 HBeAg positive and 2 anti-HBe positive) developed transient elevations in liver transaminases. Three of five HBeAg positive children cleared HBeAg after transaminases elevations. Of the five patients who underwent percutaneous liver biopsies, non-specific changes were found. It is concluded that hepatitis B carriers with normal liver tests should be followed with liver function tests alone and that long-term prognosis is good.