Hepatitis B virus is associated with chronic or acute liver diseases and with hepatocellular carcinoma. In the present study, we examined the activity of HD‐03, a polyherbal formulation, on two hepatitis B surface antigen (HBsAg) expressing human hepatocellular carcinoma cell lines, PLC/PRF/5 and HepG2/A2. We observed that HD‐03 downregulates HBsAg expression from these cell lines. Our studies have also shown that this effect is neither due to cytotoxicity on the cell lines nor due to blockade of the release of the antigen from the cells nor due to binding of the substance with the antigen. The possible mode of its antiviral activity is explained. Copyright © 2003 John Wiley & Sons, Ltd.