The host immune response to chronic HBV infection produces persistent liver injury leading to fibrosis, cirrhosis, and hepatocellular carcinoma (HCC), in parallel with partial clearance of the virus from a large fraction of hepatocytes. However, antiviral therapies to completely eliminate the infection are ineffective in 70-90% of carriers. In contrast, transient infections can be rapidly cleared through the action of the immune system in over 90% of adults newly infected with HBV. Ideally, rational approaches for treatment should be via manipulation of the immune system to induce a similar rapid clearance of chronic infections, or the application of antiviral drug therapies that mimic key steps in the antiviral response. However, there is little agreement about the essential components of viral clearance during a transient infection, and almost nothing is known about the basis for partial clearance in chronic infections. The following specific aims will address these issues, using woodchucks transiently and chronically infected with woodchuck hepatitis virus. Specific Aim 1: A major unresolved issue is whether massive cell death is essential during resolution of hepadnavirus infections in order to eliminate viral nucleic acids from the liver. Experiments will be carried out to determine how viral nucleic acids are eliminated from hepatocytes and whether hepatocyte death and compensatory proliferation may play an essential role in this process. Specific Aim 2: We recently obtained evidence of clonal expansion (>1000 cells/clone) of a large fraction of hepatocytes in livers of chronically infected woodchucks, and hypothesize that partial clearance of the virus as well as neoplastic progression may be byproducts of clonal selection of hepatocytes that have lost the ability to support high titer WHV replication. We will test this hypothesis and examine the possibility that this selection might also be used therapeutically to repopulate the liver with virus resistant hepatocytes. In summary, these studies will determine if cell death and compensatory regeneration are essential for virus clearance by the immune system. They will also determine if experimental induction of an antiviral state in a subpopulation of hepatocytes has therapeutic value or, in contrast, may enhance progression to HCC by facilitating outgrowth of virus resistant hepatocytes with oncogenic mutations.