This study was undertaken to determine the prevalence of core-gene-defective hepatitis B virus (HBV) in patients with chronic HBV infection, and the nature and significance of the deletions. PCR was performed on sera from 263 patients with chronic HBV infection. Seventeen (6.5%) patients had smaller band(s) in addition to a band of the expected size. Additional bands were also detected in the follow-up samples from 80% and 3% patients who had respectively, multiple and single bands initially. Six patients were further studied by direct sequencing. Four patients had in-frame deletions leading to loss of codons 79-122 of the core gene. Two patients had identical frameshift deletions of nucleotides 2204-2333 resulting in the loss of the first nine codons of the overlapping P gene. Follow-up samples from three of four patients studied showed deletions identical to those in the initial samples. The persistence of these deletions suggests that they were stable and that they may contribute to the chronicity of infection.