Epigenetic factors may modulate chronic Hepatitis B viral infection by affecting virion gene transcription. The aim of this study was to compare the methylation status of the intrahepatic covalently closed circular DNA (cccDNA) CpG island 2 and HBV replication capability. HBV cccDNA was extracted from liver biopsies of 55 HBsAg-positive patients with chronic hepatitis B (32 HBeAg-positive and 23 HBeAg-negative), and was analyzed for methylation status and quantity. The two Hpa II recognition sequences CCpGG in the CpG island 2 were methylated in infected liver tissues from 24 (43.6%) of 55 patients. Positive ratios of cccDNA methylation were significantly higher in HBeAg-negative patients (15/23, 65.2%) than HBeAg-positive patients (9/32, 28.1%) (P < 0.05). The percentage of methylated-cccDNA/total-cccDNA of HBeAg-negative samples (a median of 48%, ranging from 5% to 83%) was significantly higher (P < 0.001) than HBeAg-positive samples (a median of 14%, ranging from 0.26% to 35%). Ratios of relaxed circular DNA (rcDNA) to cccDNA molecules revealed that cccDNA methylation correlated with impaired virion productivity in HBeAg-positive individuals (P < 0.05). The bisulfite DNA sequencing showed that methylation density was significantly higher in HBeAg-negative than in HBeAg-positive patients (P < 0.05). The methylation level of the CpG island 2 of the cccDNA in HBeAg-negative patients was higher than that in HBeAg-positive patients, suggesting that HBV cccDNA methylation may be relevant to replication capability of HBV.