To correlate the hepatitis B virus P gene with the enzymatic activities predicted to participate in hepadnavirus reverse transcription, a series of P gene mutants containing missense mutations, in-phase insertions, and in-phase deletions was constructed by site-directed mutagenesis. These mutants were tested in the context of otherwise intact hepatitis B virus genomes for the ability to produce core particles containing the virus-associated polymerase activity. The results obtained suggest that the P protein consists of three functional domains and a nonessential spacer arranged in the following order: terminal protein, spacer, reverse transcriptase/DNA polymerase, and RNase H. The first two domains are separated by a spacer region which could be deleted to a large extent without significant loss of endogenous polymerase activity. In cotransfection experiments, all P gene mutants could be complemented in trans by constructs expressing the wild-type gene product but not by a second P gene mutant. This indicates that the multifunctional P gene is expressed as a single translational unit and independent of the core gene and furthermore that the gene product is freely diffusible and not processed before core assembly.