The small hepatitis B surface antigen (SHBs) is the most abundant hepatitis B virus (HBV) protein in individuals infected with HBV, and clearance of HBV surface antigen, which is primarily composed of SHBs, is considered a surrogate biomarker for achieving a functional cure of chronic HBV. Understanding SHBs degradation is crucial for its elimination and targeted eradication strategies. This study demonstrates that SHBs undergoes degradation via a ubiquitin/proteasome pathway, primarily through K48-linked ubiquitination, with K122 as the critical ubiquitination site. Utilizing immunoprecipitation and mass spectrometry, we identified TRIM21 (an E3 ubiquitin ligase) and OTUD4 (a deubiquitinase) as key regulators of SHBs. We verified the direct interaction between SHBs and TRIM21's coiled-coil domain, as well as the N-terminal amino acids 1-180 of OTUD4, using coimmunoprecipitation and glutathione S-transferase (GST) pull-down assays in both in vivo and in vitro settings. TRIM21 was observed to reduce SHBs stability and abundance by promoting its polyubiquitination, whereas OTUD4 acted to negate the effects of TRIM21-induced polyubiquitination, thereby stabilizing and increasing the levels of SHBs. Notably, TRIM21-mediated degradation of SHBs substantially impaired subviral particle and virion production and its biological activities such as migratory and angiogenic capabilities, opposite to the effect produced by the introduction of OTUD4. These findings suggest that TRIM21 and OTUD4 modulate SHBs protein stability and function through a ubiquitination-dependent proteasomal pathway, offering new insights into clearing SHBs and intervening in the progression of HBV-related liver diseases.IMPORTANCEThe small hepatitis B surface antigen (SHBs) is a key structural component of the hepatitis B virus (HBV) virion and subviral particles and is the most abundant HBV protein in individuals with chronic infection. Gaining a better understanding of its degradation pathways may help inform strategies to reduce SHBs levels and potentially support the design of targeted therapies. However, the specific mechanisms and processes involved in the degradation of SHBs remain largely unexplored. This study reveals that SHBs is degraded via the ubiquitin/proteasome pathway, specifically through K48-linked ubiquitination at the K122 site. TRIM21 promotes SHBs degradation by enhancing its polyubiquitination, while OTUD4 stabilizes SHBs by counteracting TRIM21's effects. TRIM21 reduces SHBs stability, subviral particle and virion production, and its related biological activities, whereas OTUD4 stabilizes SHBs, promoting its accumulation. These findings highlight the roles of TRIM21 and OTUD4 in regulating SHBs stability and function, offering new insights into potential interventions for HBV-related liver diseases.