Background: Cancer patients who are hepatitis B virus (HBV) carriers and undergoing chemotherapy (CT) may be complicated by HBV reactivation. Over 80% of hepatocellular carcinoma (HCC) patients are HBV carriers; however, the incidence of HBV reactivation during CT has not been well-reported. A prospective study was conducted to determine the incidence of HBV reactivation, the associated morbidity and mortality, and possible risk factors. Patients and methods: 102 HBsAg-positive patients with inoperable HCC underwent systemic CT. Patients received either combination cisplatin, interferon, doxorubicin and fluorouracil (PIAF) or single-agent doxorubicin. They were followed up during and for 8 weeks after CT. Results: In 102 patients, 59 (58%) developed hepatitis amongst whom 37 (36%) were attributable to HBV reactivation. Twelve (30%) died of HBV reactivation. CT was interrupted in 32 patients (86%) with reactivation and 54 (83%) without reactivation (P>0.05). The median survivals were 6.00 and 5.62 months, respectively (P=0.694). Elevated baseline alanine aminotransferase (ALT) was found to be a risk factor. Conclusion: HBV reactivation is a common cause of liver damage during CT in HBsAg-positive HCC patients. The only identifiable associated risk factor was elevated pre-treatment ALT. Further studies into the role of antiviral and novel anticancer therapies are required to improve the prognosis of these patients.