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Abstract Background The use of Lamivudine in chronic hepatitis B (CHB) is well known, however the reported rate of HBeAg sero-conversion and its durability post-treatment have varied considerably. We undertook the present study to study the effect of Lamivudine on HBeAg loss and seroconversion rates in Indian patients of CHB in relation to frequency, predictors and durability. Methods We treated 60 patients of e antigen positive CHB (with active viral replication and ongoing necro-inflammatory activity) with Lamivudine. They were followed up by monthly aminotransferases, and 3 monthly HBeAg and anti-HBe. Those who attained HBeAg sero-conversion were advised to discontinue Lamivudine after 6 months and followed up every 3 months thereafter, to see for relapse. Treatment was given for maximum of 3 years if not sero-converted. Results The annual incremental loss of HBeAg in patients receiving Lamivudine was 25 (41.6%) at end of 1st year, 33 (55%) at 2nd year and 35 (58.3%) at 3rd year. The corresponding rates for full sero-conversion were 17/60 (28.6%), 22/60 (36.6%) and 24/60 (40%) in the 3 years. HBeAg loss correlated with increased pre-therapy ALT levels (p = 0.002) and decreased pretreatment HBV-DNA levels (p = 0.004). The presence of cirrhosis had no influence on the rate of HBeAg loss. Relapse occurred in 35% (7/20) post-treatment at median time of 6 months. Conclusion Indian patients showed a higher rate of HBeAg sero-conversion in the first year of Lamivudine treatment. This correlated with baseline ALT and inversely with HBV-DNA levels. Relapse rate after treatment was high and occurred soon after stopping treatment.