Covalently closed circular DNA (cccDNA) of hepadnaviruses exists as an episomal minichromosome in the nucleus of infected hepatocyte and serves as the transcriptional template for viral mRNA synthesis. Elimination of cccDNA is the prerequisite for either a therapeutic cure or immunological resolution of HBV infection. Although accumulating evidence suggests that inflammatory cytokines-mediated cure of virally infected hepatocytes does occur and plays an essential role in the resolution of an acute HBV infection, the molecular mechanism by which the cytokines eliminate cccDNA and/or suppress its transcription remains elusive. This is largely due to the lack of convenient cell culture systems supporting efficient HBV infection and cccDNA formation to allow detailed molecular analyses. In this study, we took the advantage of a chicken hepatoma cell line that supports tetracycline-inducible duck hepatitis B virus (DHBV) replication and established an experimental condition mimicking the virally infected hepatocytes in which DHBV pregenomic (pg) RNA transcription and DNA replication are solely dependent on cccDNA. This cell culture system allowed us to demonstrate that cccDNA transcription required histone deacetylase activity and IFN-α induced a profound and long-lasting suppression of cccDNA transcription, which required protein synthesis and was associated with the reduction of acetylated histone H3 lysine 9 (H3K9) and 27 (H3K27) in cccDNA minichromosomes. Moreover, IFN-α treatment also induced a delayed response that appeared to accelerate the decay of cccDNA. Our studies have thus shed light on the molecular mechanism by which IFN-α noncytolytically controls hepadnavirus infection.