The envelope gene of the avian hepadnavirus, duck hepatitis B virus, was mutated in order to dissect the functions of the two major envelope proteins pre-S/S and S. Both envelope proteins were found to be required for virus particle assembly and secretion. The placement of stop codons after each of the first three AUG codons in the pre-S region allowed efficient translational initiation at downstream AUG codons to produce novel N-terminally truncated pre-S/S proteins. These proteins could substitute for pre-S/S protein in the production of enveloped virus production, but not in the production infectious virus. A mutant defective in myristylation of the pre-S/S protein produced reduced amounts of enveloped virus, and this virus was not infectious. Mutants defective in the pre-S/S protein accumulated high levels of covalently closed circular viral DNA (cccDNA) compared with the wild type or with a mutant defective in only the S protein. Hyperamplification of cccDNA resulted in high levels of viral RNA, consistent with the proposed role of cccDNA as the transcriptional template. Myristylation of the pre-S/S protein was not required for control of cccDNA amplification, and mutants that produced N-terminally truncated pre-S/S proteins displayed higher levels of cccDNA. We concluded that the pre-S/S protein, but not the S protein, is required for control of cccDNA amplification and persistent infection.