The pregenomic RNA directs replication of the hepatitis B virus (HBV) genome by serving both as the messenger for core protein and polymerase and as the genome precursor following its packaging into the core particle. RNA packaging is mediated by a stem-loop structure present at its 5' end designated the epsilon signal, which includes the core gene initiator AUG. The precore RNA has a slightly extended 5' end to cover the entire precore region and, consequently, directs the translation of a precore/core protein, which is secreted as e antigen (HBeAg) following removal of precore-derived signal peptide and the carboxyl terminus. A naturally occurring G1862T mutation upstream of the core AUG affects the bulge of the epsilon signal and generates a "forbidden" residue at the -3 position of the signal peptide cleavage site. Transfection of this and other mutants into human hepatoma cells failed to prove their inhibition of HBeAg secretion but rather revealed great impairment of genome replication. This replication defect was associated with reduced expression of core protein and could be overcome by a G1899A covariation, or by nonsense or frameshift mutation in the precore region. All these mutations antagonized the G1862T mutation on core protein expression. Cotransfection of the G1862T mutant with a replication-deficient HBV genome that provides core protein in trans also restored genome replication. Consistent with our findings in cell culture, HBV genotype A found in African/Asian patients has T1862 and is associated with much lower viremia titers than the European subgroup of genotype A.