Chronic hepatitis B virus (HBV) infection affects approximately 254 million individuals globally, contributing to significant morbidity and mortality due to HBV-related liver failure and cirrhosis, which result in millions of fatalities each year. Although approved antiviral nucleos(t)ide analogues can effectively suppress HBV replication, their ability to reduce hepatitis B surface antigen (HBsAg) levels in plasma remains limited. The clinical application of the immunomodulator interferon-alpha is restricted by concerns regarding its safety and the severity of associated adverse reactions, rendering long-term administration challenging. Therefore, current drug development efforts for chronic hepatitis B aim to achieve a functional cure, which is defined as HBsAg serological clearance and sustained suppression of HBV DNA. This review discusses recent advancements in novel direct-acting therapeutic strategies for the treatment of chronic hepatitis B by focusing on the progresses in HBV entry inhibitors, monoclonal antibodies, RNA interferences, and other agents that directly target the virus. Furthermore, we discuss the development of immunomodulatory therapies, including TLR-7/8 agonists, immune checkpoint inhibitors, and therapeutic vaccines. In the end, we conclude by highlighting the importance of the rational combination-strategy design to improve the functional cure rate of HBV.