Conventional treatment of chronic hepatitis B with interferon alfa-2b, lamivudine, and adefovir is limited by low rates of sustained hepatitis B virus DNA suppression and hepatitis B e antigen (HBeAg) seroconversion, increasing rates of drug resistance to the oral agents, and poor tolerability of interferon. Recently several promising new antiviral agents have emerged that possess potent antiviral effects, less toxicity, and have little or no risk of drug resistance. Two new agents, entecavir and peginterferon alfa-2a, have received recent approval by regulatory authorities in the United States and several other countries for the treatment of adults with chronic hepatitis B. In large phase III clinical trials, these agents have demonstrated superior efficacy over lamivudine in both HBeAg-positive and HBeAg-negative patients. Drug resistance occurs at a low rate in lamivudine-refractory patients treated with entecavir or is, to date, nonexistent in nucleoside-naïve patients treated with entecavir and all patients receiving peginterferon. In addition, several novel agents in clinical development, such as emtricitabine, clevudine, telbivudine, valtorcitabine, and tenofovir, have shown promising clinical profiles in patients with chronic hepatitis B. This review summarizes the recent clinical studies of these new agents and discusses the implications of these data for the management of chronic hepatitis B.