Hepadnaviruses are DNA viruses that replicate through reverse transcription of an RNA pregenome. Viral DNA synthesis takes place inside viral nucleocapsids, formed by core protein dimers. Previous studies have identified carboxy-terminal truncations of the core protein that affect viral DNA maturation. Here, we describe the effect of small amino-terminal insertions into the duck hepatitis B virus (DHBV) core protein on viral DNA replication. All insertion mutants formed replication-competent nucleocapsids. Elongation of viral DNA, however, appeared to be incomplete. Increasing the number of additional amino acids and introducing negatively charged residues further reduced the observed size of mature viral DNA species. Mutant core proteins did not inhibit the viral polymerase. Instead, viral DNA synthesis destabilized mutant nucleocapsids, rendering mature viral DNA selectively sensitive to nuclease action. Interestingly, the phenotype of two previously described carboxy-terminal DHBV core protein deletion mutants was found to be based on the same mechanism. These data suggest that (i) the amino- as well as the carboxy-terminal portion of the DHBV core protein plays a critical role in nucleocapsid stabilization, and (ii) the hepadnavirus polymerase can perform partial second-strand DNA synthesis in the absence of intact viral nucleocapsids.