Aim: This study was undertaken to investigate relationship between hepatitis B virus (HBV) CpG methylation and HBV gene transcription in sperm and sperm-derived embryos. Methods: HBV-infected patient sperm and HBV plasmid-transfected donor sperm were subjected to interspecific in vitro fertilization, methylation-specific PCR, bisulfite sequencing PCR, reverse transcription PCR and real-time quantitative PCR. Results: Positive methylation bands for CpG islands II and III in the HBV genome were observed in patient sperm but not in controls, and methylation percentages of CpG sites varied among different patient sperm samples. After fertilization, CpG sites were highly demethylated in embryos. Transcriptional levels of HBV X and S genes increased with decrease in CpG site methylation percentages. Conclusion: HBV CpG sites can be methylated in patient sperm before maturation. Methylation of CpG islands II and III participates in transcriptional regulation of HBV X and S genes, respectively, in sperm and sperm-derived embryos.