Entecavir and lamivudine are potent nucleoside analogues that can suppress hepatitis B virus (HBV) replication. However, the effects of these two antiviral agents on intrahepatic total HBV DNA and covalently closed circular DNA (cccDNA) are not known. In this study, we aimed to assess the effect of 48 weeks of entecavir/lamivudine therapy on intrahepatic total HBV DNA and cccDNA levels. Forty chronic hepatitis B patients, participating in two Phase III entecavir trials at our centre, were randomized to receive 48 weeks of either 0.5 mg once daily of entecavir (n = 21) or 100 mg once daily of lamivudine (n = 19). Their serological, virological and biochemical responses, as well as intrahepatic HBV DNA levels were monitored. There was no significant difference between entecavir and lamivudine therapy in terms of post-treatment serological, virological and biochemical responses. Both nucleoside analogues reduced serum viral load, intrahepatic total HBV DNA, and cccDNA by about 4.8 logs, 2 logs, and 1 log respectively. An increase in the proportion of intrahepatic HBV DNA in the form of cccDNA was seen after 48 weeks of therapy. In conclusion, both entecavir and lamivudine can successfully reduce intrahepatic HBV DNA and cccDNA. CccDNA becomes the dominant form of HBV DNA during viral suppression and is possibly responsible for viral rebound after short-term antiviral therapy.