Inhibition of Hepatitis B Virus (HBV) replication by small molecules that modulate capsid assembly and the encapsidation of pgRNA and viral polymerase by HBV core protein is a clinically validated approach toward the development of new antivirals. Through definition of a minimal pharmacophore, a series of isoquinolinone-based capsid assembly modulators (CAMs) was identified. Structural biology analysis revealed that lead molecules possess a unique binding mode, exploiting electrostatic interactions with accessible phenylalanine and tyrosine residues. Key analogs demonstrated excellent primary potency, absorption, distribution, metabolism, and excretion (ADME) and pharmacokinetic properties, and efficacy in a mouse model of HBV. The optimized lead also displayed potent inhibition of capsid uncoating in HBV-infected HepG2 cells expressing the sodium-taurocholate cotransporting polypeptide (NTCP) receptor, affecting the generation of HBsAg and cccDNA establishment. Based on these results, isoquinolinone derivative AB-836 was advanced into clinical development. In Phase 1b trials, AB-836 demonstrated >3 log10 reduction in serum HBV DNA, however, further development was discontinued due to the observation of incidental alanine aminotransferase (ALT) elevations.