A nosocomial outbreak of hepatitis B occurred among the inpatients of a hematology unit. Nine of the 11 infected patients died from fulminant hepatitis. An investigation was conducted to identify the source of infection and the route of transmission. Two clusters of nosocomial hepatitis B were identified. The hepatitis B virus (HBV) genome from serum samples of all case patients, of one HBsAg-positive patient with acute reactivation of the infection, and of eight acutely infected, unrelated cases was identified by PCR amplification of viral DNA and was entirely sequenced. Transmission was probably associated with breaks in infection control practices, which occurred as single events from common sources or through a patient-to-patient route, likely the result of shared medications or supplies. Sequence analysis evidenced close homology among the strains from the case patients and that from the patient with reactivation, who was the likely source of infection. Molecular analysis of viral isolates evidenced an accumulation of mutations in the core promoter/precore region, as well as several nucleotide substitutions throughout the genome. The sequences of all patients were compared with published sequences from fulminant and nonfulminant HBV infections.