Liver cell membrane localization of hepatitis B surface antigen (HBsAg) was investigated in 31 asymptomatic chronic carriers by a direct immunofluorescence technique. A close relationship was found between absence of inflammatory liver disease, presence of large amounts of HBsAg in the liver and expression of the antigen at the hepatocyte surface. Capping of HBsAg after the addition of anti-HBs serum could be inhibited by factors (temperature, metabolic inhibition) that are known to influence viral antigenic mobility at the cell surface. In two patients with chronic active hepatitis as well as in some cases showing histological features of focal parenchymal necrosis, HBsAg could be detected in the cytoplasm of a few scattered hepatocytes but never at the surface of the cells. Both the cases with CAH and one with focal parenchymal necrosis had IgG bound to the liver cell membrane. These findings are in agreement with the hypothesis that the absence of liver damage in HBsAg healthy chronic carriers is related to immune tolerance to the antigen. In chronic active liver disease the presence of IgG on the membrane of hepatocytes suggests a possible role of blocking antibodies directed against viral antigens expressed at the hepatocyte surface.