The hepatitis B virus (HBV) and hepatitis C virus (HCV) are noncytopathic, hepatotropic members of the hepadnavirus (HBV) and ffavivirus (HCV) families that cause acute and chronic necroinffammatory liver disease and hepatocellular carcinoma (HCC)(29, 38, 79). On a worldwide basis, over 500 million people are persistently infected by these viruses and are at great risk of dying prematurely from HCC (29, 64, 79, 111). It is widely believed that the outcome of both infections and the pathogenesis of the associated liver diseases are determined by host-virus interactions mediated by the immune response. It has been difficult to elucidate the viral and host factors at play in these infections, however, largely because the host range of HBV and HCV is limited to humans and chimpanzees (3, 19) and because cell culture systems and small animal models that are susceptible to HBV and HCV infection do not exist. Thus, the current state of our understanding of the biology and pathogenesis of these infections reffects what has been learned about their natural history (47, 64) and immunobiology (29, 137) in humans and chimpanzees, by the virological and immunological analysis of related hepadnavirus (131) and ffavivirus (18) infections in their natural hosts, and by biochemical, molecular, virological, and immunological analysis of cell lines (5, 15, 67, 73, 76, 88, 89, 100, 109, 114, 135, 174) and mouse models that express individual viral genes or reproduce the viral life cycles to various degrees (30, 33, 56, 63, 74, 75, 77, 83, 90, 101, 102, 107, 110, 161). Thanks to these efforts, in recent years we have gained important new insight into the viral and host factors that determine pathogenesis and outcome of HBV and HCV infection. As we will describe in this review, it now appears that HBV is a stealth virus that establishes itself very efficiently without alerting the innate immune system to its presence, although it is readily controlled when the adaptive immune response is induced. In contrast, HCV strongly induces yet cunningly evades the innate immune response and also defeats the adaptive immune response by mutation and functional inactivation.