Hepatitis B virus (HBV) exploits multiple strategies to evade host immune surveillance. Programmed cell death 1 (PD-1)/programmed death ligand 1 (PD-L1) signaling plays a critical role in regulating T cell homeostasis. However, it remains largely unknown as to how HBV infection elevates PD-L1 expression in hepatocytes. A mouse model of HBV infection was established by hydrodynamic injection with a vector containing 1.3-fold overlength HBV genome (pHBV1.3) via the tail vein. Coculture experiments with HBV-expressing hepatoma cells and Jurkat T cells were established in vitro. We observed significant decrease in the expression of phosphatase and tensin homolog deleted on chromosome 10 (PTEN) and increase in β-catenin/PD-L1 expression in liver tissues from patients with chronic hepatitis B and mice subjected to pHBV1.3 hydrodynamic injection. Mechanistically, decrease in PTEN enhanced β-catenin/c-Myc signaling and PD-L1 expression in HBV-expressing hepatoma cells, which in turn augmented PD-1 expression, lowered IL-2 secretion, and induced T cell apoptosis. However, β-catenin disruption inhibited PTEN-mediated PD-L1 expression, which was accompanied by decreased PD-1 expression, and increased IL-2 production in T cells. Luciferase reporter assays revealed that c-Myc stimulated transcriptional activity of PD-L1. In addition, HBV X protein (HBx) and HBV polymerase (HBp) contributed to PTEN downregulation and β-catenin/PD-L1 upregulation. Strikingly, PTEN overexpression in hepatocytes inhibited β-catenin/PD-L1 signaling and promoted HBV clearance in vivo. Our findings suggest that HBV-triggered PTEN/β-catenin/c-Myc signaling via HBx and HBp enhances PD-L1 expression, leading to inhibition of T cell response, and promotes HBV immune evasion. NEW & NOTEWORTHY This study demonstrates that during HBV infection, HBV can increase PD-L1 expression via PTEN/β-catenin/c-Myc signaling pathway, which in turn inhibits T cell response and ultimately promotes HBV immune evasion. Targeting this signaling pathway is a potential strategy for immunotherapy of chronic hepatitis B.