In chronic hepatitis B virus (HBV) infection, the quiescent immunotolerant phase evolves into the immunoactive phase. The aim of the present study was to clarify the virological alterations relevant to progression. Serial serum samples obtained from a patient with HBV during long-term follow-up were analysed by sequencing of the full-length HBV-DNA using polymerase chain reaction (PCR). In addition, PCR products of HBV genome from each serum sample were transfected into HuH-7 human hepatoma cells for the functional analysis of the transfected viral genomes. Based on the HBV-DNA sequence analysis, the patient had the genotype C virus, and the mutant HBV with common core promoter mutations (T(1762)A(1764)) and deletion of the pre-S region responsible for large surface protein transcription emerged before the onset of hepatitis. When the vigorous host immune response developed (indicated by the flare-up of hepatitis), the mutant HBV containing common core promoter mutations and another pre-S deletion causing lack of the surface protein promoter became predominant. The HBV-DNA sequences, other than pre-S and core promoter regions were identical to the wild-type sequence throughout the study. Transfection of PCR products containing the mutant HBV sequences resulted in increased amounts of intracellular replicative intermediates but the decreased secretion of HBsAg and HBeAg into culture media, suggesting accumulation of nonenveloped viral core particles within the cells. These results indicate that pre-S deletion and core promoter mutations may participate cooperatively in progression of the disease.