BACKGROUND & AIMS: The interaction between HBV replication and immune modulatory effects mediated by IFNα therapy is not well understood. We characterized the impact of HBV DNA replication on the early IFNα-induced immunomodulatory mechanisms. METHODS: We interrogated the transcriptional, serum cytokine/chemokine and cellular immune profiles of 28 patients with HBeAg+ chronic HBV infection (CHB) randomly assigned to one of 4 treatment cohorts (untreated n=5, weekly dosing of 360 μg Pegasys [PegIFNα] n=11, daily dose of 300 mg Viread [tenofovir disoproxil fumarate, TDF] n=6, or a combination of both n=6). Samples were characterized at multiple early time points through day 14 of therapy, after which all patients were given standard of care (180 μg Pegasys injected subcutaneously, weekly). RESULTS: PegIFNα induced a distinct and rapid up-regulation of IFN signaling pathway that coincided with increase detection of distinct serum cytokines/chemokines (IL-15, IL-6, and CXCL-10) and the up-regulation of the frequency of proliferating NK and activated total CD8+ T cells. IFNα treatment alone did not result in rapid decay of HBV replication and was not able to restore the defective HBV-specific T cell response present in CHB patients. In addition, the IFNα immune-stimulatory effects diminished after the first dose, but this refractory effect was reduced in patients where HBV replication was simultaneously inhibited with TDF. CONCLUSIONS: We present here the first comprehensive description of the early effects of IFNα treatment on immune and viral biomarkers in HBeAg+ CHB patients. Our results show that PegIFNα-induced innate immune activation directly benefits from the suppression of HBV replication.