The magnitude and significance of perinatal transmission of hepatitis B virus (HBV) were assessed in infants of 8,575 women, of whom 3.7% were seropositive for HBV surface antigen (HBsAg). The e antigen of HBV (HBeAg) was found in 7.8% of these carriers, the antibody to HBeAg (anti-HBe) was found in 30.1% of them, and HBsAg alone was found in 62.1% of them. The estimated incidence of HBsAg positivity by 6 months of age in infants of carrier women was significantly (P less than .001) higher than in controls (18.6% vs 3.0%). Transmission was most frequent (87.5%) if the carrier mother was HBeAg positive and was much less so if she was positive for anti-HBe (17.5%) or for HBsAg alone (9.6%). Toward the end of infancy incidence of HBsAg positivity among offspring of carriers and among controls was not different. Most infants positive for HBsAg and HBeAg continued with the infection beyond 6 months of age. It is estimated that about one-third of the adult asymptomatic HBV carriers in India evolve directly from perinatal infection, while the majority become infected during childhood or early adulthood.