Lamivudine (Zeffix, Epivir, GlaxoSmithKline) is the most important recent advance in the treatment of chronic hepatitis B in both adults and children. It is the only available oral treatment and has an excellent safety profile, which makes it even more attractive. It increases the rate of hepatitis B e antigen (HBeAg) loss and seroconversion in compensated chronic HBeAg-positive carriers, with subsequent improvement of histology at a similar rate as IFN-alpha. Lamivudine is mostly active in patients with elevated transaminases and is not effective in compensated patients with quiescent disease. Long-term follow-up studies are still required to evaluate long-term benefits, including those on hepatitis B surface antigen (HBsAg) seroconversion rate and disease evolution control. In decompensated patients, the drug can stabilise and improve liver function, allowing the patient to wait safely for transplantation. Patients may improve to such an extent that transplantation can be postponed. Combined with hepatitis B immunoglobulin (HBIG), lamivudine considerably decreases the risk of graft re-infection after transplantation. It is also active in chronic HBeAg-negative hepatitis patients, for whom IFN is less efficient. The major drawback is the emergence of the tyrosine-methionine-aspartate-aspartate (YMDD) mutation, which prevents further efficacy of the drug and may lead to flares of hepatitis. Due to the questions the YMDD mutation raises and because hepatitis B is a complex disease, indications for treatment must be established with care and only by physicians with expert knowledge of the disease, the drug and YMDD mutation-related issues.