Three hundred and twenty drug-free former narcotic addicts ware studied with regard to persistence of abnormalities of liver function and morphology, and their relation to hepatitis B infection, Hepatitis B antibody was present in 52.4 per cent, while HBS antigen was detected in only 6 percent. Transaminase abnormalities, initially present in 39 per cent, were found in 22 per cent sis months after cessation of drug abuse. Abnormalities tended to persist thereafter, although there was some continued return to normal levels. Liver biopsy findings of chronic persistent and aggressive hepatitis correlated with persistence of HBS antigenemia and transaminase elevation. Follow-up liver biopsies in seven subjects showed decreased inflammatory reaction in five. None showed progrsssive liver disease. We conclude that: (1) 15 to 20 per cent of former narcotics addicts have chronic persistent hepatitis or chronic aggressive hepatitis after cessation of drug abuse for six months or more; (2) serologic evidence of exposure to HBS antigen is frequent, and rapidly develops after the start of needle use; (3) although histologic and chemical abnormalities usually persist, progression did not occur, and some individuals demonstrated spontaneous improvement.