Hepatitis B virus (HBV) persists by depositing a covalently closed circular DNA (cccDNA) in the nucleus of infected cells that cannot be targeted by available antivirals. Interferons can diminish HBV cccDNA via APOBEC3-mediated deamination. Here, we show that overexpression of APOBEC3A alone is not sufficient to reduce HBV cccDNA that requires additional treatment of cells with interferon indicating involvement of an interferon-stimulated gene (ISG) in cccDNA degradation. Transcriptome analyses identify ISG20 as the only type I and II interferon-induced, nuclear protein with annotated nuclease activity. ISG20 localizes to nucleoli of interferon-stimulated hepatocytes and is enriched on deoxyuridine-containing single-stranded DNA that mimics transcriptionally active, APOBEC3A-deaminated HBV DNA. ISG20 expression is detected in human livers in acute, self-limiting but not in chronic hepatitis B. ISG20 depletion mitigates the interferon-induced loss of cccDNA, and co-expression with APOBEC3A is sufficient to diminish cccDNA. In conclusion, non-cytolytic HBV cccDNA decline requires the concerted action of a deaminase and a nuclease. Our findings highlight that ISGs may cooperate in their antiviral activity that may be explored for therapeutic targeting.