Hepatitis B virus (HBV) transgenic mice expressing rat hepatocyte nuclear factor 3beta (HNF3beta) were generated by breeding HBV transgenic mice with transgenic mice that constitutively overexpress the rat HNF3beta polypeptide in the liver. HBV 3.5-, 2.4- and 2.1-kb transcripts were reduced 2- to 4-fold in these mice relative to the HBV transgenic mouse controls. In contrast, the abundance of viral replication intermediates was profoundly reduced in HBV transgenic mice by overexpression of HNF3beta. This results, in part, from the preferential reduction in the level of the pregenomic 3.5-kb RNA relative to the precore 3.5-kb RNA. Therefore, it is apparent that increased expression of HNF3beta modestly reduces viral transcription and dramatically inhibits replication in vivo in the HBV transgenic mouse. This suggests that altering the activity of this transcription factor in vivo in chronic HBV carriers might be therapeutically beneficial.