The traditional Chinese medicine Xiao-Chai-Hu-Tang (HD-7) has been widely used to treat liver diseases in China and Japan. HD-7 consists of seven different ingredients, but which one provides the therapeutic benefits is still unknown. Here, we identified the "Minister herb" Scutellariae radix (HD-1S), but not the "King herb" Bupleuri radix (HD-1B) in HD-7, as the active component that suppresses HBV gene expression and virus production in human hepatoma cells. We have found that an aqueous extract of HD-1S not only suppressed wild-type virus but also lamivudine-resistant HBV mutant in human hepatoma cells. We show that HD-1S selectively suppresses HBV core promoter activity. Electrophoretic mobility shift assay analysis has revealed that HD-1S treatment decreases the DNA-binding activity of nuclear extract of HepA2 cells to a specific cis-element of the HBV core promoter, which includes the peroxisome proliferator-activated receptor binding site and HNF4. Furthermore, ectopic expression of PGC-1 abolished the suppression of HD-1S on HBV core promoter activity suggesting that HD-1S may act through modulating hepatic transcriptional machinery to suppress HBV viral gene expression and virus production.