Hepatitis B virus (HBV) can cause severe liver diseases including cirrhosis and hepatocellular carcinoma (HCC). There are approximately 350 million people in the world that are chronically infected by this virus, resulting in 0.5-1 million deaths every year. Most chronic HBV carriers acquired the virus early in life from their infected mothers through vertical transmission. In contrast, patients who acquired HBV from other adults through horizontal transmission will usually develop self-limited acute infection. Why vertical transmission leads to chronic infection whereas horizontal transmission leads to self-limited acute infection is unclear. HBV has a very narrow host range, which has greatly hampered its research. We have recently developed a mouse model to study the maternal effect on HBV persistence in the offspring. By crossing female hemizygous HBV transgenic mice to male naïve mice, we obtained non-transgenic mouse pups. When these non-transgenic mouse pups were injected with the HBV genomic DNA by hydrodynamic injection, the HBV replication persisted in the mouse liver for up to seven months. This is in contrast to control mice born to non-transgenic mothers, which cleared HBV after 3-4 weeks of HBV DNA injection. Our further studies indicated that the maternal HBV e antigen (HBeAg) could condition the Kupffer cells of the offspring, which would undergo M2 polarization to support HBV persistence upon re-stimulation by HBeAg. The goal of this application is to continue these previous studies to further investigate how HBeAg interacts with Kupffer cells. Specifically, we will determine how HBeAg stimulates Kupffer cells and to identify the putative HBeAg receptor in these cells. We will also determine whether HBeAg by itself is sufficient to condition Kupffer cells of the offspring to support HBV persistence and whether Kupffer cells by themselves are sufficient to support HBV persistence. We will also test the hypothesis that HBeAg conditions Kupffer cells in utero to suppress the immune response to HBV in the offspring. Finally, we will study the HBV basal core promoter mutant, which has reduced expression of HBeAg and is associated with chronic hepatitis and an increased risk for HCC, to test whether this reduction of HBeAg expression leads to the partial loss of immune tolerance. The proposed studies will provide important information for us to understand the mechanism of HBV persistence after vertical transmission and to improve the treatments for chronic HBV patients.