We have investigated the molecular diversity of Hepatitis B virus (HBV) among the HIV co-infected patients from eastern-India. HBsAg/HBV-DNA positive subjects (n=73) from 874 HIV-infected patients were analyzed by sequencing followed by genetic diversity quantification. HBV/genotype-D and HBV/sugenotype-D2 were predominant. HBV/D2 isolates from patients with low CD4 count manifested significantly lower non-synonymous substitutions (p<0.0001) and Shannon entropy (p=0.0006) in their surface and polymerase gene in comparison to those from moderately increased CD4 count. ART-induced immune-reconstitution therefore might raise non-synonymous immune/therapy escape substitutions among these HBV/D2 isolates. Decreased genetic diversity and increased viral load in the HBV/D2 isolates might facilitate the maintenance of their wild type characteristics in the low CD4 count, leading to its increased prevalence in this group. Interestingly, genetic diversity in HBV/A1, the next common subgenotype, was modified in the opposite manner. Together our results underscore the need for proper HBV molecular monitoring in HIV co-infection.