The present study sought to evaluate the structure of HBV quasispecies in Lamivudine (LMV)-failed chronic hepatitis B (CHB) patients and its impact in defining the subsequent virological responses to Tenofovir (TDF)-based rescue-therapy. By analyzing HBV clones encompassing reverse transcriptase (RT) and surface (S) region from LMV-failed and treatment-naïve CHB patients, we identified 5 classical and 12 novel substitutions in HBV/RT and 9 substitutions in immune-epitopes of HBV/S that were significantly associated with LMV failure. In silico analysis showed spatial proximity of some of the newly-identified, mutated RT residues to the RT catalytic centre while most S-substitutions caused alteration in epitope hydrophobicity. TDF administration resulted in virological response in 60% of LMV-failed patients at 24-week but non-response in 40% of patients even after 48-weeks. Significantly high frequencies of 6 S-substitutions and one novel RT-substitution, rtH124N with 6.5-fold-reduced susceptibility to TDF in vitro, were noted at baseline in TDF non-responders than responders. Follow-up studies depicted greater evolutionary drift of HBV quasispecies and significant decline in frequencies of 3 RT and 6 S-substitutions in responder-subgroup after 24-week TDF-therapy while most variants persisted in non-responders. Thus, we identified the HBV-RT/S variants that could potentially predict unfavorable response to LMV/TDF-therapy and impede immune-mediated viral clearance.