The most confusing aspect of HBV pathogenesis is the impact of HBV on host immunity. Host immunity determines the course of HBV infection, degree of liver damages, future complications, and also response to therapy. Fore long, it has been assumed that HBV induces a state of decreased immune responses in infected host; a fact that is neither correct nor has never been supported by credible experimental evidences. It is now well documented that immune responses of HBV-infected patients are equally responsible for viral suppression as well as for inducing liver damages; it acts as a double-edged sword. This is especially important in the context of development of therapy against chronic HBV infection. This is not only related to development of immune therapy or alternative therapeutic approaches, but these facts are equally important to ascertain the response to antiviral drugs. Also, host immunity is important to develop more potent HB vaccine that would be effective in all subjects and against all HBV genotypes. A comprehensive description of these highly controversial matters would be found in this chapter. This section has compiled most recent investigations about host immunity in HBV-infected subjects. Extensive discussion has been made about role of innate and adaptive immunity in chronic HBV infections. More importantly, relations between extent and nature of host immunity with degrees of liver damages have been shown in clinical settings.