Dendritic cells (DC) play an important role in the induction of T‐cell responses. We hypothesize that the hampered antiviral T‐cell response in chronic hepatitis B patients is a result of impaired dendritic cell function. In this study, we compared the number, phenotype and functionality of two important blood precursor DC, myeloid DC (mDC) and plasmacytoid DC (pDC), of chronic hepatitis B patients with healthy volunteers. No differences in percentages of mDC and pDC in peripheral blood mononuclear cells were observed between chronic hepatitis B patients and healthy controls. The allostimulatory capacity of isolated and in vitro matured mDC, but not of pDC, was significantly decreased in patients compared to controls. Accordingly, a decreased percentage of mDC expressing CD80 and CD86 was observed after maturation, compared to controls. In addition, mDC of patients showed a reduced capacity to produce tumor necrosis factor α after a stimulus with synthetic double‐stranded RNA and interferon γ. Purified pDC from patients produced less interferon α, an important antiviral cytokine, in response to stimulation with Staphylococcus aureus Cowan strain I than pDC isolated from controls. In conclusion, mDC and pDC are functionally impaired in patients with chronic hepatitis B. This might be an important way by which hepatitis B virus evades an adequate immune response, leading to viral persistence and disease chronicity. (HEPATOLOGY 2004;40:738–746.)