The carboxy-terminal sequence of the hepatitis B virus (HBV) core protein constitutes a nucleic acid binding domain that is rich in arginine residues and contains three serine phosphorylation sites. While dispensable for capsid assembly, this domain is involved in viral replication, as demonstrated by the effects of mutations on RNA packaging and/or reverse transcription; however, the underlying mechanisms are poorly understood. Here we tested a series of core protein mutants in which the three serine phosphorylation sites were replaced by glutamic acid, in parallel with a previously described deletion variant lacking the 19 C-terminal amino acid residues, for their ability to support viral replication in transfected hepatoma cells. Replacement of all serines and the deletion gave rise to nucleocapsids containing a smaller than wild-type DNA genome. Rather than a single-stranded DNA intermediate, as previously thought, this was a 2.0-kbp double-stranded DNA molecule derived from spliced pregenomic RNA (pgRNA). Interestingly, full-length pgRNA was associated with nucleocapsids but was found to be sensitive to nuclease digestion, while encapsidated spliced RNA and 3 truncated RNA species were nuclease resistant. These findings suggest that HBV pgRNA encapsidation is directional and that a packaging limit is determined by the C-terminal portion of the core protein.Hepatitis B virus (HBV) is an important human pathogen accounting for about one million deaths each year (13). The viral genome, as present in infectious virions, is a 3.2-kbp circular, partially double-stranded DNA (dsDNA) molecule that contains overlapping reading frames encoding the core protein, a reverse transcriptase (P), three surface proteins, and the X protein (20,25).Viral replication involves reverse transcription of a pregenomic RNA (pgRNA) intermediate inside nucleocapsids, which are formed by 180 or 240 core protein subunits (4-6, 30). Specific encapsidation of pgRNA occurs via binding of P protein to a 5Ј-proximal RNA stem-loop structure, termed ε. Subgenomic RNAs lack the 5Ј ε and are excluded from encapsidation. Notably, however, spliced RNA species containing all sequence elements necessary for packaging and for reverse transcription have been observed in liver tissue and in transfected cells (9,23,(26)(27)(28)(29). Viral DNA synthesis is a highly complex process involving three translocation events of P to priming sites located at the respective 5Ј and 3Ј ends of the template (17). Thus, both ends must be accessible to the encapsidated P protein. The final product is a partially doublestranded, relaxed circular DNA (rcDNA). Occasionally, one of the translocation steps fails (in situ priming), resulting in a double-stranded linear molecule (17,19,24,25).The C-terminal domain of the core protein plays a crucial role in viral replication. It is rich in arginine residues and contains three serine phosphorylation sites. Though dispensable for particle assembly, it is required for pgRNA packaging (2,3,7,10). Further, the phenotypes of core pr...