Hepatitis B virus (HBV) capsid assembly modulators (CAMs) represent a promising therapeutic approach in the treatment of chronic HBV infection. In the quest for effective therapeutics against chronic Hepatitis B virus (HBV) infection, we employed a novel binding site occupancy strategy to develop novel 2-cyclopropyl-thioureidobenzamide (CP-TBA) derivatives as potent HBV CAMs. Our diversity modification approach led to the identification of compound 17e, which demonstrated remarkable anti-HBV activity with an EC50 of 0.033 μM in HepAD38 cells. Molecular insights obtained through docking and dynamics simulations have provided a comprehensive understanding of the hydrogen bonding interactions between 17e and crucial residues of the HBV core protein, while also revealing the occupation of a novel binding site by the cyclopropyl group, thereby elucidating its inhibitory mechanism. Although 17e exhibited robust metabolic stability in plasma, it underwent rapid metabolism in human liver microsomes. This study underscores the potential of CP-TBA derivatives in crafting the next generation of HBV CAMs with enhanced activity and druggability.