Hepatitis B virus (HBV) is a major human pathogen, infection with which can lead to the development of cirrhosis and hepatocellular carcinoma. Persistant infection occurs in about 200 million people and is associated with different histological types of chronic liver disease reflecting varying levels of active hepatocyte damage and inflammation. In the last few years, vast amounts of information has accumulated relative to the structure of the virion, the genetic organization and replication of the virus, as well as the transcription and translation of viraal genes. The replicative cycle as well as the pathobiology, including the oncogenicity of HVB, could not be elucidated due to the absence of a tissue culture system in which the virus replicates. However, we succeeded in transfecting HEP G2 cells, derived from a human hepatoblastoma, with HBV DNA. A cell lines was established from these transfected cells which contains integrated and episomal HBV DNA and supports complete HBV replication. The availability of this line should abolish most of the logistic problems encountered so far. It is now experimentally feasible to study: a) the effect of hormones, growth factors, and antiviral agents on the replicaton as well as to idenify liver specific trans- cating factors involved in the replicative cycle; b) the immune response to these cells, which accumulate both surface and core antigens on their membranes; and c) the carcinogenic or co- carcinogenic effect of HBV by injecting these cells into nude mice before or after treatment with carcinogens, or tumor promoters. In addition, the oncogenic potential of HBV will be also studied by transfecting HBV DNA into an "immortalized" human liver cell line obtained by transfecting fetal human liver cells with a plasmid containing SV40 DNA mutated at the origin of replication.