Purpose This randomized, double-blind, placebo-controlled study was undertaken to evaluate the efficacy and safety of entecavir in Chinese patients with lamivudine-refractory chronic hepatitis B. Methods One hundred forty-five lamivudine-refractory patients with chronic hepatitis B were randomized to double-blind treatment with oral entecavir 1 mg (n= 116) or placebo (n= 29) daily for 12 weeks, followed by 36 weeks of open-label entecavir treatment. The primary efficacy endpoint was the mean change from baseline in serum hepatitis B virus (HBV) DNA by polymerase chain reaction (PCR) assay at week 12. Results At week 12, the mean change from baseline in serum HBV DNA by PCR assay was -4.30 log10 copies/ml for patients on entecavir compared to -0.15 log10 copies/ml for patients on placebo (P <.0001). Among patients with baseline serum alanine aminotransferase (ALT) > 1 x upper limit of normal (ULN), a higher proportion of entecavir than placebo patients (68% vs. 6%, respectively) achieved ALT normalization by week 12 ( P <.0001). After 48 weeks of entecavir treatment, the mean change in HBV DNA by PCR assay was -5.08 log10 copies/ml, and 85% of patients with baseline ALT > 1 x ULN had achieved ALT normalization. The safety profile of entecavir was similar to that of placebo during the first 12 weeks of blinded dosing. Entecavir was also well tolerated during 36 weeks of open-label treatment. Conclusions Lamivudine-refractory chronic hepatitis B patients treated with entecavir demonstrated marked HBV DNA reduction and normalization of ALT in most cases. Entecavir treatment for 48 weeks was well tolerated.