Envelopment of the hepatitis B virus (HBV) nucleocapsid depends on the large envelope protein L, which is expressed as a transmembrane polypeptide at the endoplasmic reticulum membrane. Previous studies demonstrated that the cytosolic exposure of the N-terminal pre-S domain (174 amino acids) of L was required for virion formation. N-terminal truncations of L up to Arg 103 were tolerated. To map sites in the remaining C-terminal part of pre-S important for virion morphogenesis, a series of 11 L mutants with linker substitutions between Asn 98 and Pro 171 was generated. The mutants formed stable proteins and were secreted in transfected cell cultures, probably as components of subviral hepatitis B surface antigen particles. All four constructs with mutations between Asn 98 and Thr 125 were unable to complement in trans the block in virion formation of an L-negative HBV genome in cotransfected HuH7 cells. These mutants had a transdominant negative effect on virus yield in cotransfections with the wild-type HBV genome. In contrast, all seven mutants with substitutions downstream of Ser 124 were able to envelop the nucleocapsid and to secrete HBV. The sequence between Arg 103 and Ser 124 is highly conserved among different HBV isolates and also between HBV and the woodchuck hepatitis virus. Point mutations in this region introducing alanine residues at conserved positions blocked virion formation, in contrast to mutations at nonconserved residues. These results demonstrate that the pre-S sequence between Arg 103 and Ser 124 has an important function in HBV morphogenesis.