The hepatitis B virus (HBV) envelope proteins have the ability to assemble three types of viral particles, (i) the empty subviral particles (SVPs), (ii) the mature HBV virions, and (iii) the hepatitis delta virus (HDV) particles, in cells that are coinfected with HBV and HDV. To gain insight into the function of the HBV envelope proteins in morphogenesis of HBV or HDV virions, we have investigated subdomains of the envelope proteins that have been shown or predicted to lie at the cytosolic face of the endoplasmic reticulum membrane during synthesis, a position prone to interaction with the inner core structure. These domains, referred to here as cytosolic loops I and II (CYL-I and -II, respectively), were subjected to mutagenesis. The mutations were introduced in the three HBV envelope proteins, designated small, middle, and large (S-HBsAg, M-HBsAg, and L-HBsAg, respectively). The mutants were expressed in HuH-7 cells to evaluate their capacity for self-assembly and formation of HBV or HDV virions when HBV nucleocapsid or HDV ribonucleoprotein, respectively, was provided. We found that SVP-competent CYL-I mutations between positions 23 and 78 of the S domain were permissive to HBV or HDV virion assembly. One mutation ( The hepatitis B virus (HBV) is characterized by a most peculiar budding mechanism, which is nucleocapsid independent and driven by its viral envelope proteins at a cellular internal membrane (17,35,36). The three envelope proteins, encoded by a unique open reading frame on the HBV genome, bear the hepatitis B virus surface antigen (HBsAg) and are referred to as large, middle, and small (L-HBsAg, M-HBsAg, and S-HBsAg, respectively) because they differ in the sizes of their respective amino-terminal ends (16). Interestingly, the driving force of the viral particle budding process is provided by the sole S-HBsAg protein (32), which is produced in abundance in infected cells. All three envelope proteins are synthesized at the endoplasmic reticulum (ER) membrane, where they aggregate through protein-protein interactions leading primarily to the secretion of empty S-HBsAg-coated subviral particles (SVPs) (16). It is only when L-HBsAg is present in the envelope protein aggregates at the ER membrane that the HBV nucleocapsid can be recruited in the budding complex and released as a mature virion (4). Owing to the overwhelming activity of S-HBsAg for self-assembly, in comparison to that of L-HBsAg, HBV virion formation occurs only on rare occasions.In addition to the formation of SVPs and mature HBV virions, the HBV envelope proteins can also assist in the assembly of hepatitis delta virus (HDV) particles (2, 49). HDV is an occasional satellite of HBV. Its genome consists of a circular single-stranded RNA molecule with only one open reading frame from which a protein is known to be translated (50). The latter is synthesized in two isoforms, the small and large hepatitis delta antigens (S-HDAg and L-HDAg, respectively). HDV RNA replicates without any assistance from the helper HBV, and it assembles with mul...