Since hepatitis B virus (HBV) infection can have serious sequelae, especially if infection occurs during childhood, there is a continuing need to examine its epidemiology so as to inform control measures. We analyzed trends in disease incidence and patterns of hepatitis B virus (HBV) transmission in both Canadian-born and non-Canadian-born children from 1999 to 2003, through the Enhanced Hepatitis Strain Surveillance System. Amongst Canadian-born children, the incidence of newly identified HBV infection per 100,000 declined significantly during the study period from 1.4 in 1999, to 0.5 in 2003 (RR, 0.75 per year; 95% CI, 0.60-0.95). Amongst non-Canadian-born children, the incidence of HBV infection per 100,000 ranged from 9.4 to 16.3, during the study period (linear trend test, p=0.69). Poisson regression analysis revealed that non-Canadian-born children were more likely to have HBV infection (RR, 12.3; 95% CI, 7.6 to 19.8), than Canadian-born children. HBV infection was found to be more common among children emigrating from high endemic area, than among Canadian-born children. Current Canadian immunization policy should take into consideration the protection of all children against HBV infection, including those coming from countries where mass hepatitis B vaccination programs have still not been launched.