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Background Hepatitis B surface antigen (HBsAg) can be derived from intrahepatic covalently closed circular DNA (cccDNA) and integrated hepatitis B virus (HBV) DNA (iDNA).Objective We evaluated the cccDNA and iDNA from liver tissues of 24 hepatitis B e antigen (HBeAg)(+) and 32 HBeAg(−) treatment-naïve chronic hepatitis B (CHB) participants in the North American Hepatitis B Research Network.Design For cccDNA analysis, DNA was heat-denatured and digested by plasmid-safe ATP-dependent DNase to remove relaxed circular DNA and iDNA before real-time polymerase chain reaction. For iDNA detection, total DNA was subjected to HBV hybridisation-targeted next generation sequencing assay for identification of the HBV-host junction sequences. Comparisons of HBV cccDNA and iDNA with other virological biomarkers were assessed.Results Intrahepatic cccDNA, serum HBV DNA, HBV RNA, hepatitis B core related antigen and quantitative hepatitis B surface antigen were higher in HBeAg(+) CHB. Intrahepatic hepatitis B core antigen staining was present in 87% HBeAg(+) but only 13% HBeAg(−) samples (p<0.0001). HBsAg staining was frequent in over 85% in both groups. 23 (95.8%) HBeAg(+) participants had ≤50% iDNA whereas 25 (78.1%) HBeAg(−) participants had >50% iDNA of total HBV DNA in their livers. For HBeAg(+) CHB, the iDNA integration sites were random with only 15.9% localised to the direct repeat 2 (DR2)-DR1 region. For HBeAg(−) CHB, 52.4% of the iDNA integrations were clustered at DR2-DR1. Microhomology-mediated end joining patterns of double-stranded linear DNA HBV integration was more frequent in HBeAg(+) livers.Conclusion HBeAg(−) CHB was associated with high HBsAg staining concentration despite low cccDNA levels suggesting that iDNA was the primary source of HBsAg. The high frequency of DR2-DR1 iDNA distribution in HBeAg(−) CHB suggests the selection advantage and clonal expansion of this integrant in the natural history of CHB.