The covalently closed circular DNA (cccDNA) of hepatitis B virus (HBV) is a viral center molecule for HBV infection and persistence. However, the cellular restriction factors of HBV cccDNA are not well understood. Here, we show that TGF-b can induce nuclear viral cccDNA degradation and hypermutation via activation-induced cytidine deaminase (AID) deamination activity in hepatocytes. This suppression by TGF-b is abrogated when AID or the activity of uracil-DNA glycosylase (UNG) is absent, which indicates that AID deamination and the UNG-mediated excision of uracil act in concert to degrade viral cccDNA. Moreover, the HBV core protein promotes the interaction between AID and viral cccDNA. Overall, our results indicate a novel molecular mechanism that allows cytokine TGF-b to restrict viral nuclear cccDNA in innate immunity, thereby suggesting a novel method for potentially eliminating cccDNA.Keywords: AID; cccDNA; HBV; Hypermutation; UNG Highlights • AID triggers HBV cccDNA degradation via its deamination activity.• AID induces viral cccDNA hypermutation.• TGF-b reduces viral cccDNA through AID in hepatocytes.Almost 350 million people who are chronically infected with hepatitis B virus (HBV) worldwide are at high risk of developing liver cirrhosis and hepatocellular carcinoma. Thus, HBV infection is a major global health concern [1-3]. The covalently closed circular DNA (cccDNA) of HBV plays an essential role in virus replication and persistence. After entry into the hepatocytes, HBV first forms cccDNA in the host cell's nucleus before transcribing viral RNAs, including a replicative RNA intermediate called pregenomic (pg) RNA that encodes two viral proteins, HBV core (HBc), and HBV polymerase (Pol), which encapsidate pgRNA to form a nucleocapsid. HBV Pol reverse transcribes pgRNA to produce relaxed circular DNA