Background and Aims: Effective therapies leading to a functional cure for chronic hepatitis B are still lacking. Class A capsid assembly modulators (CAM-As) are an attractive modality to address this unmet medical need. CAM-As induce aggregation of the HBV core protein (HBc) and lead to sustained HBsAg reductions in a chronic hepatitis B mouse model. Here, we investigate the underlying mechanism of action for CAM-A compound RG7907. Approach and Results: RG7907 induced extensive HBc aggregation in vitro, in hepatoma cells, and in primary hepatocytes. In the adeno-associated virus (AAV)–HBV mouse model, the RG7907 treatment led to a pronounced reduction in serum HBsAg and HBeAg, concomitant with clearance of HBsAg, HBc, and AAV-HBV episome from the liver. Transient increases in alanine transaminase, hepatocyte apoptosis, and proliferation markers were observed. These processes were confirmed by RNA sequencing, which also uncovered a role for interferon alpha and gamma signaling, including the interferon-stimulated gene 15 (ISG15) pathway. Finally, the in vitro observation of CAM-A–induced HBc–dependent cell death through apoptosis established the link of HBc aggregation to in vivo loss of infected hepatocytes. Conclusions: Our study unravels a previously unknown mechanism of action for CAM-As such as RG7907 in which HBc aggregation induces cell death, resulting in hepatocyte proliferation and loss of covalently closed circular DNA or its equivalent, possibly assisted by an induced innate immune response. This represents a promising approach to attain a functional cure for chronic hepatitis B.