Hepatitis B virus (HBV) is a causative agent for liver diseases including hepatocellular carcinoma. Understanding its interactions with cellular proteins is critical in the elucidation of the mechanisms of disease progression. Using a cell-based HBV replication system, we showed that HBV replication in HepG2 cells resulted in a cellular morphological changes displaying membrane rufflings and lamellipodia like structures reminiscent of cells expressing constitutively activated Rac1. We also showed that activated Rac1 resulted in increased viral replication. HBV replication specifically activated wild type Rac1, but not Cdc42. The Rac1 activation by HBV replication also resulted in the phosphorylation of ERK1/2 and AKT, the downstream targets of Rac1 signaling cascade. The smallest HBV viral protein, HBX, was able to activate the endogenous Rac1 and induce membrane ruffling when transfected into cells. Significantly, HBX was found to directly interact with a Rac1 nucleotide exchange factor (betaPIX) through a SH3 binding motif. Taken together, we have shown the interaction of HBV with the Rho GTPase, affecting cell morphology through the Rac1 activation pathway. HBV may possibly make use of an activated Rac1 signaling pathway for increased replication and resultant metastatic effects.