Pre-S gene-encoded proteins of the hepatitis B virus (HBV) were studied in the liver by immunofluorescence and in serum by radioimmunoassay in 30 patients with chronic HBV infection. The results were compared with molecular hybridization analysis of HBV-DNA in liver and serum, with serum hepatitis B e antigen/antibody (HBeAg/anti-HBe) status and with underlying liver histology. Pre-S peptides were detected in the serum of 11 patients, 10 of whom were positive for serum HBV-DNA and/or liver hepatitis B core antigen. Only 4 of these patients were HBeAg positive. The prevalence of serum pre-S among HBV replicating carriers was 59% (10/17) compared to only 8% (1/13) among those with non-replicating virus (P less than 0.01). All patients with circulating pre-S peptides had active liver disease. Anti-pre-S was detected in the serum of only 4 patients, 3 with integrated HBV-DNA. In contrast to serum findings, pre-S peptides were detected in the liver of all patients with histochemically demonstrable hepatitis B surface antigen (HBsAg), regardless of HBV replicative status. HBsAg carriers with integrated HBV-DNA had abundant cytoplasmic pre-S1 and pre-S2 localized in numerous ground-glass hepatocytes. It is concluded that pre-S peptides are usually displayed in the liver simultaneously with histochemically detectable HBsAg; they are secreted in the serum in association with high HBV replication and release of HBV particles, but in the absence of episomal HBV replication, pre-S peptides seem to be largely retained within hepatocytic membranes.