Covalently closed circular DNA (cccDNA) is the transcriptional template of hepatitis B virus (HBV), which interacts with both host and viral proteins to form minichromosome in the nucleus and is resistant to antiviral agents. Identification of host factors involved in cccDNA transcriptional regulation is expected to prove a new venue for HBV therapy. Recent evidence suggests the involvement of long noncoding RNAs (lncRNAs) in mediating the interaction of host factors with various viruses, however, lncRNAs that HBV targets and represses cccDNA transcription have not been fully elucidated. Here, the authors identified LINC01431 as a novel host restriction factor for HBV transcription. Mechanically, LINC01431 competitively bound with type I protein arginine methyltransferase (PRMT1) to block the HBx-mediated PRMT1 ubiquitination and degradation. Consequently, LINC01431 increased the occupancy of PRMT1 on cccDNA, leading to enhanced H4R3me2a modification and reduced acetylation of cccDNA-bound histones, thereby repressing cccDNA transcription. In turn, to facilitate viral replication, HBV transcriptionally repressed LINC01431 expression by HBx-mediated repression of transcription factor Zinc fingers and homeoboxes 2 (ZHX2). Collectively, the study demonstrates LINC01431 as a novel epigenetic regulator of cccDNA minichromosome and highlights a feedback loop of HBx-LINC01431-PRMT1 in HBV replication, which provides potential therapeutic targets for HBV treatment.