Background and Aims: HBsAg seroclearance is a key marker of functional HBV cure, with Peg-IFN-ɑ-induced elimination closely linked to T lymphocyte responses. This study evaluates the efficacy of Peg-IFN-ɑ in HBeAg-negative chronic HBV infection and correlates change in T lymphocyte subsets expressing inhibitory receptors with achieving functional cure post-treatment. Methods: From January 2008 to February 2023, HBeAg-negative chronic HBV patients at Beijing You’an Hospital were treated with Peg-IFN-ɑ alone or nucleoside analogs. Patients were categorized into HBsAg response (R) and non-response (NR) groups based on HBsAg seroclearance. Changes in T lymphocytes expressing inhibitory receptors were detected by flow cytometry before treatment, at 12 weeks, and 24 weeks, and correlated with functional cure. Results: 618 patients were enrolled. The response group was younger (39 vs. 42 years), had longer treatment (63 vs. 49 weeks), and had lower baseline HBsAg levels (1.42 vs. 2.18 log10 IU/mL) than the non-response group. The response group had sustained HBsAg decrease and higher HBV DNA inhibition and HBsAg seroconversion rates. Compared to baseline, after 24 weeks of treatment, CD4+ (P=0.044*) and CD8+ central memory T-cell (TCM) (P=0.022*) frequencies increased in the response group and decreased in the non-response group. Th2 cell frequency decreased in the response group and increased in the non-response group, P=0.013*. PD-1+CD8+T and CD160+CD8+T cell frequencies were significantly reduced in the response group compared to baseline (P=0.005**, 0.016*), while the non-response group showed an increase. Conclusion: Reduced PD-1+CD8+ and CD160+CD8+ T cell frequencies favored functional hepatitis B cure. Restoration of T-cell function is crucial for a functional cure of hepatitis B, highlighting the importance of exploring immunotherapy strategies for HBV infection.