The 20 kDa exonuclease encoded by the interferon-stimulated gene, ISG20, can inhibit the replication of hepatitis B virus (HBV), and may represent a clinically useful prognostic marker for response to interferon-alpha (IFN-α) antiviral therapy. The present study was designed to investigate the differential expression patterns of ISG20 in liver biopsy samples from treatment-naive patients with chronic hepatitis B and non-HBV infected controls and to determine the relation between the differential expression and IFN-α treatment outcome (responders vs. non-responders). HBV infection status was determined by measuring levels of hepatitis B surface antigen (HBsAg) by chemoluminescence immunoassay and of HBV DNA by real-time quantitative (q)PCR. ISG20 protein and mRNA expressions were assessed by immunohistochemistry and qPCR, respectively. Chronic hepatitis B responders showed significantly higher levels of ISG20 protein and mRNA expressions than either the chronic hepatitis B non-responders or the controls. Moreover, increased expression of ISG20 in both the nucleus and cytoplasm was correlated with positive response to IFN-α treatment. Thus, active transcription and translation of ISG20 may represent a marker to identify chronic hepatitis B patients likely to respond to IFN-α therapy. Prognostic clinical strategies based upon this marker may include genomic screening methods and immunohistochemical staining of liver biopsies. J. Med. Virol. 85:1506–1512, 2013. © 2013 Wiley Periodicals, Inc.