Chronic hepatitis B virus (HBV) infection is closely related to the development of severe liver complications, including hepatocellular carcinoma. In previous studies, we reported that in vivo long-term HBV suppression in transgenic mice can be achieved without apparent toxicity by short hairpin RNA sequentially delivered using adeno-associated viral (AAV) vectors of different serotypes. Our goal herein was to address the clinical utility of this delivery system and, in particular, to determine whether RNA interference (RNAi) and its ability to induce long-term HBV suppression will modulate the development of HBV-associated liver pathology. As a model system, we used a unique HBV transgenic mouse model, containing a 1.3 times over length of the HBV genome, on the ICR mouse background. These transgenic mice produce high serum HBV titers comparable with human chronic HBV patients, and, importantly, manifest characteristic HBV-associated pathology, including progressive hepatocellular injury and the development of hepatocellular adenoma. Using this system, we injected animals with AAV vectors expressing either HBV-specific or a control luciferase-specific short hairpin RNA and followed animals for a total of 18 months. We report herein that AAV-mediated RNAi therapy profoundly inhibits HBV replication and gene expression, with a significant reduction in hepatic regeneration, liver enzymes and, importantly, the appearance of liver adenomas. Indeed, the therapeutic effect of RNAi correlated with the reduction in HBV titers. Our data demonstrate that appropriately designed RNAi therapy has the potential to prevent formation of HBV-associated hepatocellular adenoma.