Patients with chronic hepatitis B histologically confirmed of liver fibrosis S2/S3 (similar to metavir F2/F3, Ishak 2/3/4) are randomly assigned in a 1:1 ratio. One arm is entecavir alone for 2 years; the other is entecavir alone for the first 0.5 year, entecavir plus pegylated interferon (peg-IFN) for 1 year, entecavir for another additional 0.5 year. Patients will be assessed at baseline, at every six months for blood count, liver function test, HBVDNA, AFP, prothrombin time, thyroid function, liver ultrasonography, and Fibroscan. The second liver biopsy will be performed to evaluate regression rate of liver fibrosis 1.5 years after initial therapy.

Inclusion Criteria:

1. Ages from 18 to 65 years old;
2. Male or female;
3. Treatment-naive patients with chronic HBV-induced fibrosis S2/S3 (similar to F2/F3, Ishak 2/3/4), who consent to undergo liver biopsy before and after treatment;
4. Patients with HBeAg-positive, HBVDNA>2×10<4> IU/ml or with HBeAg-negative, HBVDNA>2×10<3> IU/ml;
5. Agree to be follow-up regularly;
6. signature of written inform consent.

Exclusion Criteria:

1. Patients with decompensated cirrhosis: including ascites, hepatic encephalopathy, esophageal varices bleeding or other complications of decompensated cirrhosis or hepatocelluar carcinoma;
2. Patients who are allergic to entecavir, interferon, or their components, and those considered not suitable for medications used in this study;
3. Patients coinfection with HCV or HIV, alcoholic liver disease, autoimmune liver disease, genetic liver disease, drug-induced liver injury, severe non-alcoholic fatty liver disease or other chronic liver diseases;
4. Patients with baseline AFP level higher than 100 ng/ml and possible malignant lesion on image, or AFP level higher than 100 ng/ml for continuous three months;
5. Creatinine >1.5×ULN;
6. Patients with other uncured malignant tumors;
7. Patients with severe diseases of heart, lung, kidney, brain, blood system or other organs;
8. Patients with severe neurological or psychological disease (e.g. epilepsy, depression, mania and schizophrenia);
9. Patients with poorly controlled diabetes, hypertension or thyroid disease;
10. Patients with any other reasons not suitable for the study.