Entecavir (ETV; Baraclude) is a novel deoxyguanosine analog with activity against hepatitis B virus (HBV). ETV differs from the other nucleoside/tide reverse transcriptase inhibitors approved for HBV therapy, lamivudine (LVD) and adefovir (ADV), in several ways: ETV is >100-fold more potent against HBV in culture and, at concentrations below 1 microM, displays no significant activity against human immunodeficiency virus (HIV). Additionally, while LVD and ADV are obligate DNA chain terminators, ETV halts HBV DNA elongation after incorporating a few additional bases. Three-dimensional homology models of the catalytic center of the HBV reverse transcriptase (RT)-DNA-deoxynucleoside triphosphate (dNTP) complex, based on the HIV RT-DNA structure, were used with in vitro enzyme kinetic studies to examine the mechanism of action of ETV against HBV RT. A novel hydrophobic pocket in the rear of the RT dNTP binding site that accommodates the exocyclic alkene moiety of ETV was predicted, establishing a basis for the superior potency observed experimentally. HBV DNA chain termination by ETV was accomplished through disfavored energy requirements as well as steric constraints during subsequent nucleotide addition. Validation of the model was accomplished through modeling of LVD resistance substitutions, which caused an eightfold decrease in ETV susceptibility and were predicted to reduce, but not eliminate, the ETV-binding pocket, in agreement with experimental observations. ADV resistance changes did not affect the ETV docking model, also agreeing with experimental results. Overall, these studies explain the potency, mechanism, and cross-resistance profile of ETV against HBV and account for the successful treatment of naive and LVD- or ADV-experienced chronic HBV patients.