The extent to which the free-vaccine policy impacts the initiation and completion of a hepatitis B vaccine series is poorly understood. The aim of this study was to evaluate the impact of the free-vaccine policy on hepatitis B vaccination. A provincial survey was conducted in 2006 in Fujian Province, south-east of China, where the free-vaccine policy for hepatitis B was announced in 2002 and implemented in 2003. A total of 1628 children were investigated, and 1443 (88.6%) were included in this analysis. Among the children studied, 55.2% were vaccinated within 24 h of birth, and 76.1% completed the hepatitis B vaccine series on time. The rate of hepatitis B surface antibody positivity increased from 29.9% among children born in 1992 to 90.5% among children born in 2005, while the corresponding HBV infection rate decreased from 30.4% to 1.72%. Logistic regression indicated that, compared to children born between 1996 and 2001, the odds ratios (ORs) for timely initiation were 2.57 (95% confidence interval [CI], 1.71–3.84), 5.24 (95% CI, 3.26–8.43) and 9.06 (95% CI, 4.48–18.34) among children born in 2003, 2004 and 2005, respectively; the corresponding ORs for completing the vaccine series were 4.23 (95% CI, 1.97–9.10), 3.76 (95% CI, 1.81–7.82) and 4.94 (95% CI, 1.74–14.00) among children born in 2003, 2004 and 2005, respectively. Children with delayed vaccine initiation (>24 h after birth) were less likely to complete the vaccine series than those who received a timely first dose (OR = 0.02, 95% CI, 0.005–0.09). The impact of the free-vaccine policy on vaccine initiation and vaccine series completion did not differ by children's residence area (rural vs urban). As hypothesized, the odds of completing the vaccine series increased after the free-vaccine policy was announced in 2002 among children with delayed initiation (>24 h after birth) but not among those with timely initiation (≤24 h after birth). In conclusion, the free-vaccine policy significantly improved the timely initiation and completion of the vaccine series. The impact of this policy on completion of the vaccine series was larger among children with delayed vaccine initiation.