The role of hepatocyte nuclear factor 1α (HNF1α) in the regulation of gene expression and replication of hepatitis B virus (HBV) is not fully understood. Previous reports have documented the induction of the expression of viral large surface protein (LHBs) by HNF1α through activating viral Sp1 promoter. Large amount of LHBs can block the secretion of hepatitis B surface antigen (HBsAg). Here we found that HNF1α overexpression inhibited HBV gene expression and replication in Huh7 cells, resulting in marked decreases in HBsAg, hepatitis B e antigen (HBeAg) and virion productions. In contrast, knockdown of endogenous HNF1α expression enhanced viral gene expression and replication. This HNF1α-mediated inhibition did not depend on LHBs. Instead, HNF1α promoted the expression of NF-κB p65 and slowed p65 protein degradation, leading to nuclear accumulation of p65 and activation of the NF-κB signaling, which in turn inhibited HBV gene expression and replication. The inhibitor of the NF-κB signaling, IκBα-SR, could abrogate this HNF1α-mediated inhibition. While the dimerization domain of HNF1α was dispensable for the induction of LHBs expression, all the domains of HNF1α was required for the inhibition of HBV gene expression. Our findings identify a novel role of HNF1α in the regulation of HBV gene expression and replication.