Inclusion Criteria:

• Male or female subjects aged 18-65 years inclusive
• Documented chronic hepatitis B infection determined by the presence of serum HBsAg for a least 6 months
• Serum HBV DNA ≥105 copies/ml for HBeAg positive subjects or ≥104 copies/ml for HBeAg negative subjects (Real-time PCR, LLQ=1000cp/ml) at study screening (within 2 weeks before baseline), respectively.
• ALT value ≥2 times the upper limit of normal (ULN) at the time of screening, as determined using laboratory ranges and documented ALT abnormal within 6 month prior the study screening.
• Compensated liver disease with the following laboratory and clinical parameters study screening:
• prothrombin time ≤ 2 seconds above normal direct bilirubin
• Albumin≥35g/L
• Total bilirubin ≤2.5mg/dL (≤ 43 µmol/L) or normal direct bilirubin
• No history of variceal bleeding
• No history of encephalopathy
• No history of ascites
• Willing and able to undergo two liver biopsies (prior to dosing, and after 48 weeks of therapy; only apply to subjects who are enrolled to the sites where liver biopsy is required).
• Agree not to participate in any other investigational trials or to undertake other HBV systemic antiviral regimens during participation in this study

Exclusion Criteria:

A subject will not be eligible for inclusion in this study if any of the following criteria apply:

• Any serious or active medical or psychiatric illnesses other than hepatitis B which, in the opinion of the investigator, would interfere with patient treatment, assessment or compliance with the protocol. This would include, may not limit to, renal, cardiac, pulmonary, vascular, neurogenic, digestive, metabolic (diabetes, thyroid disorders, adrenal disease), immunodeficiency disorders, active infection or cancer.
• Documented evidence of active liver disease due to other causes including
• co-infection hepatitis C (HCV), Subjects who are anti-HCV positive and in whom HCV RNA is undetectable are considered to be HCV seropositive and will not be eligible
• co-infection with hepatitis delta (HDV)
• co-infection with HIV
• autoimmune hepatitis (antinuclear antibody titre>1:160)
• Alanine aminotransferase(ALT) > 10 times ULN at screening or history of acute exacerbation leading to transient decompensation
• Serum alpha fetoprotein (AFP) >50 ng/mL.
• Hepatocellular carcinoma as evidenced by one of the following:
• suspicious foci on ultrasound or radiological examination
• where no positive ultrasound finding, but serum alpha-fetoprotein > 100ng/ml
• Adequate renal function defined as serum creatinine >1.5 mg/dL (>130 µmol/L)
• Adequate hematological function defined as:
• Absolute neutrophil count <1 x 10³/mm³ (1 x 10^9/L)
• Platelets<80 x 10³/mm³ (80 x 10^9/L); platelets<100 x 10³/mm³ (100 x 10^9/L)
• Hemoglobin<12g/dL (120 g/L)(males) or <10 g/dL (100 g/L) (females)
• Active alcohol or drug abuse or history of alcohol or drug abuse considered by the investigator to be sufficient to hinder compliance with treatment, participation in the study or interpretation of results.
• Use of immunosuppressive therapy, immunomodulatory therapy (including interferon or thymosin), systemic cytotoxic agents within the previous 6 months or during the study.
• Use of chronic anti-viral agents(e.g. lamivudine, adefovir dipivoxil, entecavir, famciclovir, tenofovir, FTC, ganciclovir, DAPD, LfMA, HBIg, etc.), Chinese herbal medicines known to have activity against HBV within the previous 3 months or during the study; use of agents with effect of ALT reduction (e.g. schisandra agents) during the study.
• Received nephrotoxic drugs (e.g., aminoglycosides, amphotericin B, vancomycin, cidofovir, foscarnet, cis-platinum, pentamidine etc.) or competitors of renal excretion (e.g., probenecid within 2 months prior to study screening or the expectation that patient will receive any of these during the course of the study.
• Received hepatotoxic drugs (e.g., anabolic steroids, ketaconazole, itraconazole, isoniazid, rifampin, rifabutin) within 2 months prior to study screening or expected to receive these during the course of the study.
• Previous (or planned) participation in an investigational trial involving administration of investigational compound within 2 months prior to the study screening.