Mutations in the highly conserved tyrosine-methionine-aspartate-aspartate (YMDD) motif are frequently associated with resistance to antivirals and represent a major concern in the treatment of hepatitis B virus (HBV) infection. Conventional methods fail to detect minority populations of drug-resistant viral quasispecies if they represent less than 25% of the total sample virus population. The amplification refractory mutation system real-time PCR (ARMS RT-PCR) was combined with molecular beacon technology using the LightCycler system. The samples from HBV patients selected for assay evaluation included (i) 57 samples from treatment-naïve patients for biological discriminatory ability (cutoff) estimation, (ii) 12 samples from patients with treatment failure that were M204V positive by sequencing, and (iii) 13 samples from patients with treatment failure that were negative for mutation at codon 204 by sequencing. The discriminatory ability of the assay was 0.25% when tested with laboratory-synthesized DNA target sequences. The median mutant-to-wild-type ratio for samples from naive patients tested positive for the wild type and for mutant variants was 0.01% (5th and 95th percentiles = 0.0001 and 0.04%, respectively). A value of 0.04% was selected as the biological cutoff of the assay of clinical samples. In all samples M204V positive by sequencing (12/12), the mutant variant was detected as the predominant population (range, 82.76 to 99.43%). Interestingly, in 5 (38%) of 13 samples negative by sequencing, the M204V variant was detected at a ratio above the biological cutoff (0.05 to 28%). The assay represents an efficient technique for the early detection and quantification of M204V variants before mutant strains emerge to dominate the population.