BACKGROUND & AIMS: NVR 3-778 is a first-in-class hepatitis B virus (HBV) capsid assembly modulator that can inhibit HBV replication. We performed a proof-of-concept study to examine the safety, pharmacokinetics, and antiviral activity of NVR 3-778 in patients with chronic HBV infection. METHODS: We performed a phase 1 study in 73 hepatitis B envelope antigen (HBeAg)-positive patients with chronic HBV infection without cirrhosis. In a 2-part study (part 1 in New Zealand and part 2 in Hong Kong, Singapore, Taiwan, Korea, and the United States), patients were randomly assigned to groups that were given oral NVR 3-778 (100 mg, 200 mg, or 400 mg daily or 600 mg or 1000 mg twice daily) or placebo for 4 weeks. Additional groups received combination treatment with pegylated interferon (pegIFN) and NVR 3-778 (600 mg twice daily) or pegIFN with placebo. RESULTS: Reductions in serum levels of HBV DNA and HBV RNA were observed in patients receiving > 1200 mg/d NVR 3-778. The largest mean reduction in HBV DNA was observed in the group given NVR 3-778 plus pegIFN (1.97 log(10) IU/mL), compared with the groups given NVR 3-778 or pegIFN alone (1.43 log(10) IU/mL and 1.06 log(10) IU/mL, respectively). The mean reduction in HBV RNA was also greatest in the group given NVR 3-778 plus pegIFN (2.09 log(10) copies/mL), compared with the groups given NVR 3-778 or pegIFN alone (1.42 log(10) copies/mL and 0.89 log(10) copies/mL, respectively). There was no significant mean reduction in HBsAg during the 4-week treatment period. There were no discontinuations and no pattern of dose-related adverse effects with NVR 3-778. CONCLUSIONS: In a phase 1 study of HBeAg-positive patients with chronic HBV infection without cirrhosis, NVR 3-778 was well tolerated and demonstrated antiviral activity. The agent reduced serum levels of HBV DNA and HBV RNA, to the greatest extent in combination with pegIFN. The observed reductions in HBV RNA confirmed the novel mechanism of NVR 3-778.