Functional analysis of the roles of the nuclear receptor response elements (NRREs) in the transcription and replication of hepatitis B virus (HBV) in the context of its whole genome has been hampered by the extensive overlapping of the NRREs with the regions encoding viral proteins. We introduced point mutations that inactivate the NRREs individually without altering the open reading frames of viral proteins. These mutations in the context of a plasmid containing 1.2 copies of the HBV genome were transiently transfected into the human hepatoma cell line Huh7. Inactivation of the NRRE in either the preC promoter (NRRE_preC) or enhancer I (NRRE_enhI) led to moderate reductions in synthesis of viral RNAs. Concurrent inactivation of both NRREs led to 7- to 8-fold reductions in synthesis of the preC, pregenomic, and preS RNAs and a 15-fold reduction in synthesis of the S RNA. The accumulation of viral DNA in the cytoplasmic nucleocapsids and virion particles in the culture medium was also reduced seven- to eightfold. These results suggest that these NRREs are critical for the efficient propagation of HBV in hepatocytes. In cotransfection experiments we also found that overexpression of PPAR-RXR in the presence of their respective ligands led to a fourfold increase in pregenomic RNA synthesis and a four- to fivefold increase in viral DNA synthesis, while it had little or no effect on synthesis of the other viral RNAs. Similar effects were observed with overexpression of PPAR-RXR in the presence of their respective ligands. This activation was dependent on NRRE_preC, because the increase in synthesis of viral RNA and DNA was not observed when this site was mutated. Likewise, no activation of synthesis of pregenomic RNA and viral DNA by PPAR-RXR was observed in a naturally occurring NRRE_preC mutant of HBV. Our results suggest that interactions between nuclear receptors and NRREs present in the HBV genome may play critical roles in regulating its transcription and replication during HBV infection of hepatocytes.