Inclusion Criteria:

• HBV DNA positive with DNA levels at screening greater than or equal to 3,000,000 copies/mL.
• Documented to be HBsAg positive for > 6 months OR HBsAg positive and IgM anti-HBc negative and anti-HBs negative. Patients may be HBeAg positive, and anti-HBe negative OR HBeAg negative (pre-core mutant) and anti-HBe positive.
• HBeAg positive and anti-HBe negative OR HBeAg negative (pre-core mutant) and anti-HBe positive with positive HBsAg for the previous 6 months
• AST and ALT levels which are less than or equal to 10 times the upper limit of normal.
• Bilirubin levels less than or equal to 1.5 x ULN or bilirubin levels > 1.5 x ULN with diagnosis of Gilbert’s disease and conjugated bilirubin within normal limits.

Exclusion Criteria:

• Currently receiving antiviral, immunomodulatory or corticosteroid therapy
• Previous treatment with lamivudine, lobucavir, adefovir, famciclovir, or any other investigational nucleoside for HBV infection
• Previous treatment with interferon must have ended at least 6 months prior to screening visit
• History of ascites, variceal hemorrhage or hepatic encephalopathy
• Co-infection with HCV or HIV
• Evidence of cirrhosis or hepatocellular carcinoma (alpha fetoprotein)