The immune system plays a crucial role in the control and eventual clearance of hepatitis B virus (HBV) infection. Immune mechanisms are now believed to participate in the pathogenesis of the hepatitis C virus (HCV) and to account perhaps for the high frequency of progression from acute to chronic disease. Although IFN-α has been proven effective in the treatment of viral chronic hepatitis B and C, response rates are low, reactivation of disease is appreciable and side effects of treatment are frequent. Both antiviral and immune modulatory activity have been ascribed to IFN-α and are believed to account for its therapeutic effect. Immune-active peptides including those derived from the thymus have also been evaluated over the past 15 years for the treatment of viral chronic hepatitis. This review summarizes clinical studies and experimental observations which provide the rationale for the use of these agents in the treatment of chronic hepatitis associated with HBV and HCV. Primary attention is focused on thymosin-α (Tα1), a synthetic peptide, which has been evaluated in clinical trials. Tα1 has in vivo and in vitro immune-modulatory activity on lymphoid populations as well as the potential of more direct antiviral activity. Preliminary results of clinical trials utilizing combinations of Tαl with various IFN preparations are also reviewed.