Hepatitis B e-antigen negative (e(−)) chronic HBV infection (CHI) encompasses a heterogeneous clinical spectrum ranging from inactive carrier (IC) state to e(−) chronic hepatitis B (CHB), cirrhosis and hepatic decompensation. In the backdrop of dysfunctional virus-specific T cells, natural killer (NK) cells are emerging as innate effectors in CHI. We characterized CD3− CD56+ NK cells in clinically well-defined, treatment-naive e(−) patients in IC, e(−)CHB or decompensated liver cirrhosis (LC) phase to appraise their role in disease progression. The NK cell frequencies increased progressively with disease severity (IC 8.2%, e(−)CHB 13.2% and LC 14.4%). Higher proportion of NK cells from LC/e(−)CHB expressed CD69, NKp46, NKp44, TRAIL and perforin, the last two being prominent features of CD56bright and CD56dim NK subsets, respectively. The frequencies of CD3− CD56+ NK cells together with TRAIL+ CD56bright and Perforin+ CD56dim NK cells correlated positively with serum alanine transaminase levels in e(−)CHB/LC. K562 cell-stimulated NK cells from e(−)CHB/LC exhibited significantly greater degranulation but diminished interferon-γ production than IC. Further, Perforin+ NK cell frequency inversely correlated with autologous CD4+ T-cell count in e(−) patients and ligands of NK receptors were over-expressed in CD4+ T cells from e(−)CHB/LC relative to IC. Co-culture of sorted CD56dim NK cells and CD4+ T cells from e(−)CHB showed enhanced CD4+ T-cell apoptosis, which was reduced by perforin inhibitor, concanamycin A, suggesting a possible perforin-dependent NK cell-mediated CD4+ T-cell depletion. Moreover, greater incidence of perforin-expressing NK cells and decline in CD4+ T cells were noticed intrahepatically in e(−)CHB than IC. Collectively, NK cells contribute to the progression of e(−)CHI by enhanced TRAIL- and perforin-dependent cytolytic activity and by restraining anti-viral immunity through reduced interferon-γ secretion and perforin-mediated CD4+ T-cell lysis. © 2016 European Society of Clinical Microbiology and Infectious Diseases