The human liver chimeric mouse with primary human hepatocytes (PHHs) engraftment has been demonstrated to be a useful animal model to study hepatitis B virus (HBV) pathogenesis and evaluate anti-HBV drugs. However, the disadvantages of using PHHs include the inability for cellular expansion in vitro, limited donor availability, individual differences, and ethical issues, necessitating the development of alternatives. To obtain in vitro expandable hepatocytes, we optimized the hepatic differentiation procedure of the human liver progenitor cell line, HepaRG, using four functional small molecules (4SM) and enriched the precursor hepatocyte-like cells (HLCs). HepaRG cells of different hepatic differentiation states were engrafted to immunodeficient mice (FRGS) with weekly 4SM treatment. The HepaRG-engrafted mice were challenged with HBV and/or treated with several antivirals to evaluate their effects. We demonstrated that the 4SM treatment enhanced hepatic differentiation and promoted cell proliferation capacity both in vitro and in vivo. Mice engrafted with enriched HepaRG of prehepatic differentiation and treated with 4SM displayed approximately 10% liver chimerism at week 8 after engraftment and were maintained at this level for another 16 weeks. Therefore, we developed a HepaRG-based human liver chimeric mouse model: HepaRG-FRGS. Our experimental results showed that the liver chimerism of the mice was adequate to support chronic HBV infection for 24 weeks and to evaluate antivirals. We also demonstrated that HBV infection in HepaRG cells was dependent on their hepatic differentiation state and liver chimerism in vivo. Overall, HepaRG-FRGS mice provide a novel human liver chimeric mouse model to study chronic HBV infection and evaluate anti-HBV drugs.