The two key events in the life-cycle of the hepatitis B virus (HBV) involve (1) the generation from viral genomic DNA of the covalently closed circular DNA transcriptional template, and (2) the reverse transcription of the viral pregenomic RNA to form the HBV DNA genome. Diversity in the HBV genome is ensured by the low fidelity of the viral reverse transcriptase (rt). Particular selection pressures such as antiviral therapy readily select out escape mutants from this pre-existing quasispecies pool. Antiviral drug resistance in chronic hepatitis B can be caused by many factors, including the viral mutation frequency, the intrinsic mutability of the antiviral target site, the selective pressure exerted by the drug, the magnitude and rate of virus replication, the overall replication fitness of the mutant, the genetic barrier of the compound and the availability of replication space. In the setting of HIV coinfection, the rate of replication is increased by one to two orders of magnitude, accelerating the emergence of drug resistance in this setting. The HBV genome is arranged into frame-shifted and overlapping reading frames in such a manner that antiviral drug-resistance-associated changes in the rt can result in changes in the viral envelope protein. These HBV isolates with altered surface antigens exhibit reduced binding of specific and neutralizing antibody and so have diagnostic and public health implications, especially in the setting of HIV coinfection where the risk of transmission is increased. Thus, prevention of resistance requires the adoption of strategies that effectively control virus replication, including the use of combination chemotherapy.