The structural maintenance of chromosome 5/6 complex (Smc5/6) is a restriction factor that represses hepatitis B virus (HBV) transcription. HBV counters this restriction by expressing HBV X protein (HBx), which targets Smc5/6 for degradation. However, the mechanism by which Smc5/6 suppresses HBV transcription and how HBx is initially expressed is not known. In this study we characterized viral kinetics and the host response during HBV infection of primary human hepatocytes (PHH) to address these unresolved questions. We determined that Smc5/6 localizes with Nuclear Domain 10 (ND10) in PHH. Co-localization has functional implications since depletion of ND10 structural components alters the nuclear distribution of Smc6 and induces HBV gene expression in the absence of HBx. We also found that HBV infection and replication does not induce a prominent global host transcriptional response in PHH, either shortly after infection when Smc5/6 is present, or at later times post-infection when Smc5/6 has been degraded. Notably, HBV and an HBx-negative virus establish high level infection in PHH without inducing expression of interferon-stimulated genes or production of interferons or other cytokines. Our study also revealed that Smc5/6 is degraded in the majority of infected PHH by the time cccDNA transcription could be detected and that HBx RNA is present in cell culture-derived virus preparations as well as HBV patient plasma. Collectively, these data indicate that Smc5/6 is an intrinsic antiviral restriction factor that suppresses HBV transcription when localized to ND10 without inducing a detectable innate immune response. Our data also suggest that HBx protein may be initially expressed by delivery of extracellular HBx RNA into HBV-infected cells.