Dendritic cells (DCs) induce and regulate T-cell-mediated immune responses. Circulating precursor (p)DC1 and pDC2 from patients with chronic hepatitis B virus (HBV) infection were quantified by flow cytometry. To assess their function, DC1 were cultured from patients and compared to those of healthy volunteers. HBV patients exhibited a significant decrease in the proportion of freshly isolated pDC1 to pDC2. DC1 propagated from patients showed lower expression of costimulatory molecules and impaired allostimulatory capacity in comparison to controls. After exposure to proinflammatory cytokines, expression of costimulatory molecules, secretion of interleukin-12 (IL-12) and allostimulatory properties increased, but capacity for T-cell stimulation and IL-12 production remained inferior to that of control DCs. HBV-DNA was amplified by polymerase chain reaction in DC1 cultured from all patients. Viral particles were visible in DC1 by electron microscopy. These results suggest that intracellular presence of HBV impairs DC1 functional maturation and subsequent deficits in T-lymphocyte activation may contribute to viral persistence.