We have previously shown that IFN-β inhibits hepatitis B virus (HBV) replication by noncytolytic mechanisms that either destabilize pregenomic (pg)RNA-containing capsids or prevent their assembly. Using immortalized murine hepatocyte cell lines stably transfected with a doxycycline (dox)-inducible HBV replication system, we now show that replication-competent pgRNA-containing capsids are not produced when the cells are pretreated with IFN-β before HBV expression is induced with dox. Furthermore, the turnover rate of preformed HBV RNA-containing capsids is not changed in the presence of IFN-β or IFN-γ under conditions in which further pgRNA synthesis is inhibited by dox removal. In summary, these results demonstrate that types 1 and 2 IFN activate hepatocellular mechanism(s) that prevent the formation of replication-competent HBV capsids and, thereby, inhibit HBV replication.