This 3 arm study will compare the efficacy and safety of combination therapy with PEGASYS + adefovir dipivoxil (ADV) versus PEGASYS monotherapy, in HBeAg-negative chronic hepatitis B patients.Patients will be randomized to receive 1)PEGASYS 180 micrograms sc weekly + ADV 10mg po daily for 48 weeks, followed by ADV 10mg po monotherapy for an additional 48 weeks, and a further 48 week treatment-free follow-up, 2)PEGASYS 180 micrograms sc weekly + ADV 10mg po daily for 48 weeks, followed by a 96 week treatment-free follow-up, or 3)PEGASYS 180 micrograms sc monotherapy weekly for 48 weeks, followed by a 96 week treatment-free follow-up. The anticipated time on study treatment is 1-2 years, and the target sample size is <100 individuals.

Inclusion Criteria:

• adult patients, 18-70 years of age;
• chronic hepatitis B;
• positive HBsAg, positive anti-HBe, negative anti HBsAg, negative HBeAg for at least the prior 6 months;
• either nucleoside analogue naive, or has not received IFN-a in the past 6 months.

Exclusion Criteria:

• positive for hepatitis A, C, D or HIV;
• history or other evidence of a medical condition associated with chronic liver disease other than hepatitis B;
• antiviral, antineoplastic or immunomodulatory treatment <=6 months prior to first dose of randomized treatment.