The duck hepatitis B virus (DHBV) envelope is comprised of two transmembrane (TM) proteins, the large (L) and the small (S), that assemble into virions and subviral particles. Secondary-structure predictions indicate that L and S have three ␣-helical, membrane-spanning domains, with TM1 predicted to act as the fusion peptide following endocytosis of DHBV into the hepatocyte. We used bafilomycin A1 during infection of primary duck hepatocytes to show that DHBV must be trafficked from the early to the late endosome for fusion to occur. Alanine substitution mutations in TM1 of L and S, which lowered TM1 hydrophobicity, were used to examine the role of TM1 in infectivity. The high hydrophobicity of the TM1 domain of L, but not of S, was shown to be essential for virus infection at a step downstream of receptor binding and virus internalization. Using wild-type and mutant synthetic peptides, we demonstrate that the hydrophobicity of this domain is required for the aggregation and the lipid mixing of phospholipid vesicles, supporting the role of TM1 as the fusion peptide. While lipid mixing occurred at pH 7, the kinetics of insertion of the fusion peptide was increased at pH 5, consistent with the location of DHBV in the late-endosome compartment and previous studies of the nonessential role of low pH for infectivity. Exchange of the TM1 of DHBV with that of hepatitis B virus yielded functional, infectious DHBV particles, suggesting that TM1 of all of the hepadnaviruses act similarly in the fusion mechanism.In order to initiate productive cell infection, enveloped viruses need to fuse to a host cell membrane in order to release a capsid into the cytoplasm. Details of this process have been well described for viruses such as the influenza A virus, human immunodeficiency virus, or tick-borne encephalitis virus. However, details of the virus fusion process in the Hepadnaviridae, a family of enveloped viruses that replicate in the liver, remain unknown. Studies of the early infection steps of hepatitis B virus (HBV) have been hampered by the lack of a suitable infection system. However, the study of duck hepatitis B virus (DHBV), which provides a primary cell culture infection system, has enabled elucidation of some viral-entry mechanisms, most notably the identification of the attachment receptor, carboxypeptidase D (CPD) (15,16,33,35).The DHBV envelope is comprised of two transmembrane proteins, the large (L) and small (S) surface proteins, that assemble into virions and subviral particles (SVPs). These proteins are translated by differential initiation from a single pre-S/S open reading frame. Hence, the L protein contains a 161-amino-acid (aa) pre-S extension to the common 167-aa C-terminal S domain sequence which comprises the S protein. Secondary-structure predictions suggest that the S protein and consequently the L protein have three ␣-helical, membranespanning domains, termed transmembrane domains one, two, and three (TM1, TM2, and TM3, respectively). The S protein forms the main structural component of the envel...