Hepatitis B virus (HBV) represents a serious worldwide health problem. The acute infection is usually self-limiting but may prove fatal, and, in addition, up to 10% of infected individuals become chronic carriers of the disease. The total number of carriers has been estimated at 280 million. Chronicity frequently progresses to cirrhosis the liver and hepatocellular carcinoma. Chronic carriers represent the main reservoir of the virus, with transmission occurring through contaminated blood products, IV drug abuse, sexual contact, and from mother to infant at birth. A precise understanding of the mechanism of viral replication is required to devise strategies for eliminat-ing the carrier state. This proposal will address several unresolved issues pertaining to the replication of the viral genome and viral morphogenesis. The first specific aim is to examine core protein mutants for assembly and for encapsidation of pregenomic RNA, polymerase, and polymerase-RNA complexes. The proteins will be expressed in insect cells using a baculovirus expression system or in in vitro translation systems and in vitro assays will be developed to examine these functions. The ability of core mutants to complement the replication of a core minus HBV mutant will be examined in the human hepatocellular carcinoma cell line, HepG2. The mechanism of encapsidation and the functional significance of the virion associated kinase will be explored. The second specific aim will be to express polymerase and polymerase functional domains in insect cells and to develop in vitro assays for reverse transcription, pregenomic RNA binding, nucleotide binding, and RNase H activity. The third specific aim will be to examine the RNA sequence requirement for encapsidation of pregenomic RNA by core and for interaction of pregenomic RNA with polymerase. The in vitro RNA transcripts used in assays for core and polymerase functions will be altered to determine the minimal sequences required for recognition. The final specific aim will be to utilize the information obtained in the in vitro assays to make specific mutations in the HBV genome and examine replication the mutants in HepG2 cells.