HBV is highly evolved. It has a small and compact genome that makes very efficient use of its nucleotide sequence. Many regions are highly conserved, even between different hepadnaviruses. Yet the potential for significant change is also present. The precore or core gene and basal core promoter (BCP) variants, which reduce or abrogate HBeAg production, usually appear at the beginning of the seroconversion phase from HBeAg to anti-HBe. The gradual removal of the tolerogenic effect of HBeAg leads to the “awakening” of the immune response. Precore and basal core promoter variants have been associated with fulminant hepatitis, but host factors are also implicated. Resolution of the mechanisms by which these variants are selected, their effects on HBV replication, and their pathogenicity has been hampered by the absence of a reliable and robust cell culture system, and the use of viral strains with additional sequence changes in many studies.