Duck hepatitis B virus, a DNA virus closely related to human hepatitis B virus, was studied in infected duck liver. Subviral particles resembling the viral nucleocapsid cores were isolated from persistently infected liver and shown to have a DNA polymerase activity that utilizes an endogenous template and synthesizes both plus- and minus-strand viral DNA. Synthesis of the viral minus-strand DNA utilized an RNA template that was degraded as it was copied. Viral plus-strand synthesis occurred on the completed minus-strand DNA. A pathway for the replication of the DNA genome of hepatitis B-like viruses by reverse transcription of an RNA intermediate is proposed.