A human hepatoblastoma cell line was stably transfected with a head-to-tail dimer of the Hepatitis B virus (HBV), subtype adw, genome to generate a cell line which produces HBV. FIAU [1-(2'-deoxy-2'-fluoro-1-beta-D-arabinofuranosyl-5-iodo)uracil] inhibited viral replication in these cells with an IC50 of 0.90 microM, as determined by PCR analysis of extracellular Dane particle DNA, and displayed a 50% cytotoxic concentration (TC50) of 344.3 microM, as determined using the MTT assay. The selectivity index of FIAU (TC50/IC50) was 382.6. In cells incubated for 10 days with FIAU (100 microM) and then incubated with drug-free media with daily media changes for 7 days, viral DNA replication was markedly inhibited but resumed within 24 h after drug removal, demonstrating that the in vitro anti-HBV activity of FIAU is reversible. Both the antiviral activity and cytotoxicity of FIAU were reversed by the addition of equimolar to 10-fold excess molar concentrations of thymidine. The de-iodinated metabolite of FIAU, FAU, had only marginal anti-HBV activity at 100 microM, indicating that this metabolite does not contribute significantly to the activity of FIAU. The examination of intracellular viral DNA replicative intermediates revealed that FIAU was 2000-fold more active against duck HBV DNA replication in human hepatoma cells (IC50 = 0.075 microM) than against this same virus in chicken liver cells (IC50 = 156 microM). FIAU was anabolized to a 25-fold greater extent in human hepatoma cells than in chicken cells, indicating that the anti-HBV activity of this nucleoside analog is dependent, in part, on its phosphorylation by the host cell.