Infection by hepatitis B virus (HBV) genotype C is associated with a prolonged viremic phase, delayed hepatitis B e antigen (HBeAg) seroconversion, and an increased incidence of liver cirrhosis and hepatocellular carcinoma compared with genotype B infection. Genotype C is also associated with the more frequent emergence of core promoter mutations, which increase genome replication and are independently associated with poor clinical outcomes. We amplified full-length HBV genomes from serum samples from Chinese and U. S. patients with chronic HBV infection and transfected circularized genome pools or dimeric constructs of individual clones into Huh7 cells. The two genotypes could be differentiated by Western blot analysis due to the reactivities of M and L proteins toward a monoclonal pre-S2 antibody and slightly different S-protein mobilities. Great variability in replication capacity was observed for both genotypes. The A1762T/G1764A core promoter mutations were prevalent in genotype C isolates and correlated with increased replication capacity, while the A1752G/T mutation frequently found in genotype B isolates correlated with a low replication capacity. Importantly, most genotype C isolates with wild-type core promoter sequence replicated less efficiently than the corresponding genotype B isolates due to less efficient transcription of the 3.5-kb RNA. However, genotype C isolates often displayed more efficient virion secretion. We propose that the low intracellular levels of viral DNA and core protein of wild-type genotype C delay immune clearance and trigger the subsequent emergence of A1762T/G1764A core promoter mutations to upregulate replication; efficient virion secretion compensates for the low replication capacity to ensure the establishment of persistent infection by genotype C.