Ground glass hepatocytes (GGHs), a histological hallmark of chronic hepatitis B virus (HBV) infection, contain excessive hepatitis surface antigen (HBsAg) in the endoplasmic reticulum (ER), which is linked to unfolded protein response (UPR). The mechanism by which HBV activates UPR has not been fully defined. To investigate this, HepG2-NTCP cells and primary human hepatocytes (PHHs) were either infected with HBV or transduced with adenoviral vectors expressing replication-competent HBV genome or individual HBV genes. UPR markers were evaluated by qPCR, Western blotting, and immunofluorescence. Apoptosis and cell viability were measured by Caspase-3/7 and ATPlite assay respectively. We found that UPR markers were induced by the overexpression of HBsAg in HepG2-NTCP cells and PHHs. Elevation of UPR-induced genes showed a dose-dependent correlation with HBsAg levels. In HBV-infected livers, GGHs also demonstrated excessive accumulation of HBsAg associated with increased BIP/GRP78 staining, a marker of UPR. Prolonged activation of UPR by HBsAg overexpression induced signs of apoptosis. Overexpression of HBsAg can induce ER stress through protein kinase RNA-like endoplasmic reticulum kinase (PERK) pathway in vitro, and may be linked to the appearance of GGHs. The activation of UPR by HBsAg may sensitize hepatocytes to cell death and result in possible subsequent cellular changes leading to a premalignant phenotype.