Hepatitis B virus (HBV) is classified into seven major genotypes (A–H). Brazil, a country of continental proportions, has three prevailing lineages of HBV genotypes A, D, and F. Distinct HBV genotypes have been associated with differential risk of disease progression. Pre-S gene deletions and single nucleotide polymorphisms have also been linked to progression to liver diseases. In this study, the molecular epidemiology of HBV was examined in Southern Brazil. The occurrence of multiple HBV infections, HBV recombination, and genetic markers of disease progression were also evaluated. Seventy-eight persons infected with HBV had their viruses characterized molecularly by nested PCR, DNA sequencing, and phylogenetic inference. Multiple infections and recombinant viruses were evaluated by clonal and bootscanning analyses. The vast majority (96%) of the strains belonged to different D subgenotypes. Three of the four strains with unresolved genotypic classification showed evidence of dual infections with distinct D subgenotypes by clonal analysis. There was also evidence of intragenotype mosaic viruses. While four viruses had pre-S deletions as major variants, another two displayed minor variants with such characteristics. One strain carried the F141L mutation, associated recently with increased risk of hepatocellular carcinoma. These results emphasize the need for monitoring HBV genotype distribution around South America, as well as for the presence of genetic markers of disease progression in subjects diagnosed with HBV recently. J. Med. Virol. 83:2103–2112, 2011. © 2011 Wiley Periodicals, Inc.