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Aliment Pharmacol Ther 2011; 33: 501–513 Summary Background First-line treatment options for chronic hepatitis B (CHB) consist of nucleos(t)ide analogues with a high barrier to resistance (entecavir and tenofovir) or the immunomodulatory agent peginterferon (PEG-IFN). The optimal choice for individual patients remains controversial. Aim To review treatment options for CHB, with a focus on deciding between prolonged nucleos(t)ide analogue therapy or a finite course of PEG-IFN. Methods A comprehensive literature search was undertaken. Results Long-lasting, treatment-maintained suppression of hepatitis B virus (HBV) DNA without resistance is achievable in most patients by entecavir or tenofovir. A sustained off-treatment response is, however, unlikely and long-term therapy must be anticipated. PEG-IFN offers a higher rate of sustained response in a subgroup of patients, but is frequently complicated by side effects. Pre-treatment predictors of response, including HBV genotype, alanine aminotransferase and HBV DNA levels, aid in selecting patients for PEG-IFN therapy. Furthermore, on-treatment markers such as quantitative hepatitis B surface antigen may be applied to identify nonresponders early during the PEG-IFN treatment course, thereby preventing unnecessary treatment. Conclusions Both nucleos(t)ide analogues and PEG-IFN can be prescribed as first-line treatment options for CHB. However, PEG-IFN should only be considered for patients with a high chance of response based on pre-treatment and on-treatment factors.