Hepatitis B virus (HBV) chronically infects 296 million individuals and there is no cure. As an important step of viral life cycle, the mechanisms of HBV egress remain poorly elucidated. With proteomic approach to identify capsid protein (HBc) associated host factors and siRNA screen, we uncovered tumor susceptibility gene 101 (TSG101). Knockdown of TSG101 in HBV-producing cells, HBV-infected cells and HBV transgenic mice suppressed HBV release. Co-immunoprecipitation and site mutagenesis revealed that VFND motif in TSG101 and Lys-96 ubiquitination in HBc were essential for TSG101-HBc interaction.In vitroubiquitination experiment demonstrated that UbcH6 and NEDD4 were potential E2 ubiquitin-conjugating enzyme and E3 ligase that catalyzed HBc ubiquitination, respectively. PPAY motif in HBc and Cys-867 in NEDD4 were required for HBc ubiquitination, TSG101-HBc interaction and HBV egress. Transmission electron microscopy confirmed that TSG101 or NEDD4 knockdown reduces HBV particles count in multivesicular bodies (MVBs). Our work indicates that TSG101 recognition for NEDD4 ubiquitylated HBc is critical for MVBs mediated HBV egress.