The APOBEC3 family of mammalian cytidine deaminases, including APOBEC3G (A3G), has been shown to function as innate antiviral factors against retroviruses and can also suppress the replication of the hepatitis B virus (HBV). The mechanism by which A3G inhibits HBV replication remains to be elucidated. In this study, we show that the inhibitory effect of APOBEC3 proteins on HBV replication was mainly at the DNA level, with only a minor effect on viral RNA packaging. The anti-HBV effect of A3G was independent of the DNA-editing function, and the mode of inhibition was not due to HBV DNA degradation. The editing-independent antiviral activity of A3G could target DNA-RNA hybrids as well as single-stranded DNA. Finally, we show that there was a preferential decrease in the accumulation of longer minus-strand DNA by A3G, compared to the shorter minus-strand DNA, and suggest that A3G exerts its inhibitory effect at very early stages during viral reverse transcription.