Current therapies for chronic hepatitis B virus (HBV) infection are limited in their effect on viral gene expression and replication. Recent reports have shown that RNA interference can be induced in mammalian cells by short interfering RNA duplexes (siRNA). Here we studied the effects of an HBV-specific 21-bp siRNA targeted to the surface antigen region (HBsAg), where three major viral mRNAs overlap, on HBV gene expression and replication both in a cell culture system and in a mouse model for HBV replication. Transfection of siRNA into HepG2.2.15 cells, which constitutively produce HBV particles, caused a significant reduction in viral RNA production that was accompanied by a >80% drop in the secretion of viral HBsAg and HBeAg into the medium. The effect of RNAi was tested in vivo in a mouse model that we have developed for HBV infection, which entails hydrodynamic injection of a plasmid bearing the HBV genome into tail veins of mice. Injection of the HBV plasmid induces viral replication and generation of HBV viral particles detectable in the mouse sera. Co-injection of the HBV plasmid together with siRNA caused a significant inhibition in the level of viral transcripts, viral antigens, and viral DNA detected in the livers and sera of the treated mice relative to control animals. Results suggest that siRNA is capable of inhibiting HBV replication in vivo and thus may constitute a new therapeutic strategy for HBV infection.