To evaluate the long-term efficacy and safety of lamivudine treatment for chronic hepatitis B and the impact of emergence of YMDD mutation of hepatitis B virus (HBV). A total of 429 patients with serum HBsAg, HBeAg and HBV DNA positive were randomized to receive either lamivudine 100 mg daily or a placebo in a 3:1 ratio for the first 12 weeks. Thereafter, all patients were administered with lamivudine 100 mg/d for 5 years and followed up for 2 years. After 12 weeks of the lamivudine treatment, serum HBV DNA levels decreased rapidly and HBV DNA negativity (< 1.6 pg/mL) was 92.2%, whereas it was only 14.1% (P < 0.01) in the placebo group. At the end of 5 years, serum HBV DNA continued to be substantially suppressed. The loss of HBeAg and seroconversion were significantly correlated with baseline alanine aminotransferase (ALT) levels, in patients with baseline ALT > 2 x upper limits of normal, the loss of HBeAg was 54% and seroconversion rate was 50%, respectively. YMDD mutation developed in 70.8% of the patients at years 5. In YMDD mutant patients, HBV DNA levels were increased moderately and with mild to moderate elevations of ALT. ALT flares (ALT > 5ULN) occurred in 22 patients, 16 with YMDD variants and six with non-variants. One year durability of seroconversion after stopping lamivudine was 80%. Lamivudine is effective and tolerable for chronic hepatitis B.