Hepatitis delta virus (HDV) is a small RNA virus that contains one 1.7-kb single-stranded circular RNA of negative polarity. The HDV particle also contains two isoforms of hepatitis delta antigen (HDAg), small (SHDAg) and large HDAg. SHDAg is required for the replication of HDV, which is presumably carried out by host RNA-dependent RNA polymerases. The localization and the HDAg and host RNA polymerase responsible for HDV replication remain important issues to be addressed. In this study, using recombinant SHDAg fused with a heterologous nucleolar localization sequence (NoLS) to confine its subcellular localization in nucleoli, we aimed to study the effect of SHDAg subcellular localization on HDV RNA replication. The initiation of genomic RNA synthesis from antigenomic template was hardly detectable when SHDAg was fused with the NoLS motif and localized mainly in nucleoli. In contrast, the initiation of antigenomic RNA synthesis was not affected. Drug treatment to release a SHDAg-NoLS mutant from nucleoli could partially restore the replication of HDV genomic RNA from antigenomic RNA. This also recovered the cointeraction between SHDAg and RNA polymerase II. These data strongly suggest that nuclear polymerase (RNA polymerase II) is involved in the synthesis of genomic RNA and that the synthesis of antigenomic RNA can occur in nucleoli. Our results support the idea that the replication of HDV genomic RNA or antigenomic RNA is likely to be carried out by different machineries in different subcellular localizations.