HBV replicates through reverse transcription of an RNA intermediate; the inherent lack of proofreading causes a high mutation frequency. Mutations in the precore and core promoter regions that abolish or reduce the production of hepatitis B e antigen occur most commonly. Patients with these HBV variants remain viremic and can develop progressive liver disease. Mutations in the core promoter region are associated with an increased risk of hepatocellular carcinoma. Exogenous selection pressure might favor certain mutations. Mutations in the HBV polymerase that confer resistance to nucleoside and nucleotide analog treatments are a major barrier to the success of therapy for hepatitis B. The development of antiviral drug resistance negates the initial treatment response and can lead to hepatitis flares and hepatic decompensation. Prompt addition of another drug to which the virus is not cross-resistant is required. Mutations in the HBV surface protein that facilitate escape from host immunity are responsible for the failure of immune prophylaxis in infants who received HBV vaccine and in liver transplant recipients who received hepatitis B immune globulin.