Hepatitis B e antigen (HBeAg) negative chronic hepatitis B (CHB) is frequently caused by a mutation (G1896A) in the hepatitis B virus (HBV) precore (PC) reading frame that creates a stop codon, causing premature termination of the PC protein. During lamivudine treatment, drug resistance develops at a similar rate in HBeAg positive and HBeAg negative CHB. Lamivudine-resistant HBV mutants have been shown to replicate inefficiently in vitro in the absence of PC mutations, but it is unknown whether the presence of PC mutations affects replication efficiency or antiviral sensitivity. This study utilized the recombinant HBV baculovirus system to address these issues. HBV baculoviruses encoding the G1896A PC stop codon mutation were generated in wild-type (WT) and lamivudine-resistant (rtM204I and rtL180M + rtM204V) backgrounds, resulting in a panel of 6 related recombinant baculoviruses. In vitro assays were performed to compare the sensitivities of the PC mutant viruses with lamivudine and adefovir and to compare relative replication yields. The PC mutation did not significantly affect sensitivities to either adefovir or lamivudine. WT HBV and PC mutant HBV showed similar replication yields, whereas the replication yields of the lamivudine-resistant mutants were greatly reduced in HBeAg positive HBVs, confirming previous observations. However, the presence of the PC mutation was found to compensate for the replication deficiency in each of the lamivudine-resistant mutants, increasing the replication yields of each virus. In conclusion, the PC stop codon mutation appears to increase the replication efficacy of lamivudine-resistant virus but does not affect in vitro drug sensitivity.