Chronic hepatitis B continues to be a major cause of end-stage liver disease and hepatocellular carcinoma worldwide. Nucleos(t)ide analogues have proven to be effective in controlling the disease and perhaps decreasing the incidence of hepatocellular carcinoma. However, development of drug resistance is a major limitation to their long-term effectiveness. Understanding the mechanisms of drug resistance are important for designing new agents and devising strategies to manage and prevent the development of antiviral drug resistance. The development of resistance is determined by an interplay of viral, host, and drug characteristics Homology of the HBV polymerase to the human immunodeficiency virus-1 reverse transcriptase has allowed predictions to be made on the effect mutations have on HBV polymerase structure. In vitro functional studies provide complementary information. Several broad principles on the mechanism of resistance have emerged from these studies. First, most of the primary mutations cluster in the vicinity of the incoming nucleotide and act by directly affecting the position or stability of the bound substrate, template, or primer. In contrast, secondary mutations tend to occur away from the nucleotide-binding pocket. Finally, the structural and functional consequences of mutations are quite variable among the different agents. This paper reviews the key mutations and mechanisms associated with resistance to the nucleos(t)ide analogues approved for clinical use and discuss new targets for drug development.