Functional cure, defined as sustained hepatitis B surface antigen (HBsAg) seroclearance with unquantifiable hepatitis B virus (HBV) DNA at 24 weeks off treatment, is a favorable treatment endpoint in chronic hepatitis B (CHB). Nonetheless, functional cure is rarely attained with the current treatment modalities of nucleos(t)ide analogues (NUCs) and pegylated interferon alpha. Multiple novel virus-targeting agents and immunomodulators are under development for HBV with functional cure as the treatment goal. Among virus-targeting agents, antisense oligonucleotides and small-interfering RNAs are the most advanced in the developmental pipeline, and can induce potent and sustainable HBsAg suppression. The other virus-targeting agents have varying effects on HBsAg and HBV DNA, depending on the drug mechanism. In contrast, immunomodulators have modest effects on HBsAg and have limited roles in monotherapy. Multiple combination regimens incorporating RNA interference agents with immunomodulators have been studied through many ongoing clinical trials. These combination strategies demonstrate synergistic effects in inducing functional cure, and will likely be the future direction of development. Despite the promising results, research is warranted to optimize treatment protocols and to establish criteria for NUC withdrawal after novel therapies. Functional cure is now an attainable target in CHB, and the emerging novel therapeutics will revolutionize CHB management.