Background: Liver injury in many patients with chronic hepatitis B is sporadic and is often characterized by acute exacerbations alternating with relatively normal liver function. The aim of this study was to perform detailed serological and biochemical analysis during periods of active liver disease to better understand the mechanisms responsible for the cyclic nature of liver injury. Methods: A series of serum samples from 19 hepatitis B e antigen (HBeAg)-positive patients were analyzed for alterations in serum hepatitis B virus (HBV) DNA, HBeAg, anti-HBe production, and HBeAg-specific immune complex formation before, during, and after spontaneous acute exacerbations of liver injury. Results: This analysis revealed significant correlations between increasing levels of serum HBV DNA, HBeAg, HBeAg-specific immune complexes, and liver injury. These results suggest that increases in viral replication and accumulation of viral proteins in the serum and intracellularly and the subsequent immune response play an important role in initiating acute exacerbations of liver injury in chronic hepatitis B infection. Conclusions: We propose that production of the secreted and cellular forms of the nucleoprotein reaches a threshold level and elicits specific immune responses, which mediate liver injury.