Of 262 institutionalized patients with mental retardation of various etiologies, 10% were positive for Australia antigen by complement fixation (CF) testing, while 34.1% of 138 patients with Down's syndrome were positive. Serum samples from 27 mentally retarded patients with acute, infectious hepatitis, acquired during an epidemic were negative for antigen. Twenty-one of 34 patients (61.8%) with acute hepatitis and two of nine patients (22.2%) with chronic hepatitis had the antigen. Two of 18 women with hepatitis during pregnancy had antigen, and one of their children had antigen in its cord serum, without clinical hepatitis. None of 27 serum specimens from pregnant women who delivered children with Down's syndrome was positive for antigen. Antibody was found primarily in multiply transfused hemophiliacs. In all, 121 specimens were positive for antigen by CF, and 96 by agar gel diffusion, a 79.3% concordance. The CF test was 32- to 64-fold more sensitive than agar gel in detection of antigen. Screening of pretransfusion blood and the elimination of units containing Australia antigen can be expected to lower the incidence of posttransfusion hepatitis.