Within six months, acute viral hepatitis, type B, developed in three individuals associated with a nursing home in Denver. This attack rate, 1.4 cases per 100 patients and employees, was apparently higher than the reported incidence of hepatitis B in Denver during the same period. Parenteral inoculations could not be implicated as the means of acquiring hepatitis B. However, two of the hepatitis patients had had sexual contact within six months before their illness with an employee who was an insulin-dependent diabetic and a symptomatic carrier of HB-Sg. In addition, anti-HB-S antibodies were detected in his homosexual roommate. Although the chronic carrier was a food-handler, a seroepidemiologic survey of the employee population showed no spread of HB-Sag by means of food or casual contact. Only 1 (4.6%) of 22 employees tested had anti-HB-S antibodies. These results suggest that household and, in particular, sexual contact with a symptomatic HB-SAg carrier may be an effective nonparenteral or inapparent parenteral mode of transmitting HB-SAg.