Exacerbations of chronic hepatitis B are common in endemic countries. Acute exacerbation of chronic hepatitis B virus (CHB-AE) causing derangement of liver functions may be seen in a flare of HBV in immune clearance phase or as a reactivation of HBV in patients with inactive or resolved HBV infection. While reactivation of HBV is usually seen in HBsAg positive patients, it is being increasingly recognized in patients with apparently resolved HBV infection who do not have HBsAg in serum but have IgG antibody to core antigen (anti-HBc) in the serum, especially so in patients on chemotherapy, immunosuppressive therapy or undergoing hematopoietic stem cell transplantation. In an icteric patient who is HBsAg positive, it may be difficult to differentiate CHB-AE from acute viral hepatitis B (AVH-B). Both may have similar clinical presentation and even IgM anti-HBc, the traditional diagnostic marker of AVH-B, may also appear at the time of exacerbation of CHB. The differentiation between CHB-AE and AVH-B is important not only for prognostication but also because management strategies are different. Most cases of AVH-B will resolve on their own, HBsAg clearance is achieved spontaneously in 90-95% of adults and treatment is rarely indicated except in the few with severe/fulminant disease. In contrast, in CHB-AE, the onset of jaundice may lead to decompensation of liver disease and treatment is warranted. The mechanisms of acute exacerbation and the differentiating features between AVH-B and CHB-AE are reviewed. ( J CLIN EXP HEPATOL 2013;3:301-312)