The natural course of chronic hepatitis B (CH-B) virus infection is reportedly variable, and the long-term outcomes in hepatitis B e antigen (HBeAg)-negative chronic hepatitis B infection are distinct from HBeAg-positive chronic hepatitis. However, the molecular virological factors that contribute to the progression of liver disease in the south Indian setting remain largely unclear. We prospectively studied 679 consecutive patients for HBsAg, HBeAg, anti-HBe, and HBV DNA by qualitative PCR. Randomly selected samples were subjected to bidirectional sequencing to reveal core/precore variants. Of the total 679 chronic HBV cases investigated, 23% (154/679) were replicative HBV carriers. Furthermore, amongst the 560 HBV DNA samples analyzed, 26% (146/560) were viremic. Among the 154 HBeAg positive cases, HBV DNA was positive in 118 cases (77%), significantly (p<0.001) higher than the anti-HBe positive (7%) (28/406) cases. Significant increase in liver disease (p<0.01) with ALT enzyme elevation (p<0.001) was observed in both HBe and anti-HBe viremic cases. Interestingly, low frequencies of mutations were seen in the precore region of the HBV strains studied. HBV precore and core promoter variants were less often detected in subjects with "e" negative chronic HBV infection and, therefore, may not have a prognostic role in determining liver disease sequelae in this part of tropical India.