Reverse transcription in hepadnaviruses is primed by the viral reverse transcriptase (RT) (protein priming) and requires the specific interaction between the RT and a viral RNA signal termed , which bears the specific template sequence for protein priming. The product of protein priming is a short oligodeoxynucleotide which represents the 5 end of the viral minus-strand DNA and is covalently attached to the RT. We have now identified truncated RT variants from the duck hepatitis B virus that were fully active in the initial step of protein priming, i.e., the covalent attachment of the first nucleotide to the protein (RT deoxynucleotidylation), but defective in any subsequent DNA polymerization. A short sequence in the RT domain was localized that was dispensable for RT deoxynucleotidylation but essential for the subsequent DNA polymerization. These results have thus revealed two distinct stages of protein priming, i.e., the initial attachment of the first nucleotide to the RT (RT deoxynucleotidylation or initiation of protein priming) and the subsequent DNA synthesis (polymerization) to complete protein priming, with the second step entailing additional RT sequences. Two models are proposed to explain the observed differential sequence requirement for the two distinct stages of the protein priming reaction.Reverse transcription in hepadnaviruses (hepatitis B viruses, [HBVs]) is carried out by a unique virus-encoded reverse transcriptase (RT) (26, 28). The RT is able to initiate DNA synthesis de novo, using the RT itself as a protein primer (19,32,34,35; for a review, see reference 12). This protein priming reaction requires the specific interaction between the RT and a short RNA signal, termed ε, located at the 5Ј end of the viral pregenomic RNA (pgRNA) (the template for reverse transcription) (23, 33). The unique ability of the hepadnavirus RT to carry out specific RNA recognition and protein priming is reflected in its structural organization, which is both similar to, and distinct from, that of conventional RTs (6,12,24). The N-terminal TP (so-called terminal protein) domain is conserved among all hepadnaviruses but absent from all other known RTs encoded by retroviruses or other retroelements. In contrast, the central RT domain and the C-terminal RNase H domain share sequence homologies with conventional RTs. A highly variable spacer or tether domain appears to link the TP and RT domains.It is now well established that both the N-terminal TP and central RT domains are required for the RT to bind to ε and to carry out protein priming. Furthermore, protein priming requires additional sequences from the RT domain that are dispensable for ε binding (11,23,33). These additional amino acid sequences from the RT domain are presumably required for some aspects of viral DNA synthesis during protein priming, as follows. Using an internal bulge located on the ε stemloop structure as a specific template and an invariant tyrosine residue within the TP domain as a protein primer, the RT synthesizes, de novo, a 3-to 4-nucl...