APOBEC3G is a cellular cytidine deaminase displaying broad antiretroviral activity. Recently, it was shown that APOBEC3G can also suppress hepatitis B virus (HBV) production in human hepatoma cells. In the present study, we characterized the mechanisms of APOBEC-mediated antiviral activity against HBV and related hepadnaviruses. We show that human APOBEC3G blocks HBV production in mammalian and nonmammalian cells and is active against duck HBV as well. Early steps of viral morphogenesis, including RNA and protein synthesis, binding of pregenomic RNA to core protein, and self-assembly of viral core protein, were unaffected. However, APOBEC3G rendered HBV core protein-associated full-length pregenomic RNA nuclease-sensitive. Ongoing reverse-transcription in capsids that had escaped the block in morphogenesis was not significantly inhibited. The antiviral effect was not modulated by abrogating or enhancing expression of the accessory HBV X protein, suggesting that HBV X protein does not represent a functional homologue to the HIV vif protein. Furthermore, human APOBEC3F but not rat APOBEC1 inhibited HBV DNA production. Viral RNA and low-level DNA produced in the presence of APOBEC3F or rat APOBEC1 occasionally displayed mutations, but the majority of clones were wild-type. In conclusion, APOBEC3G and APOBEC3F but not rat APOBEC1 can downregulate the production of replication-competent hepadnaviral nucleocapsids. In contrast to HIV and other retroviruses, however, APOBEC3G/3F-mediated editing of nucleic acids does not seem to represent an effective innate defense mechanism for hepadnaviruses.