The function of the X gene was clarified by examination of the transient production of hepatitis B virus (HBV) particles by transfected recombinant HBV DNA (pHBV-3 DNA) and its frameshift mutant (delta X) of the X open reading frame into hepatocellular carcinoma HuH-7 and HepG2 cells. No reduction of viral mRNAs was observed in the HuH-7 cells by the delta X mutant, whereas mRNAs underwent marked reduction in HepG2 cells. No reduction in core particle production was observed in HuH-7 cells, but in HepG2 cells reduction was considerable. To clarify the significance of the delta X mutation in the trans-acting function of the X gene in hepatoma cells, the chloramphenicol acetyl/transferase (CAT) assay was conducted. Transfection of plasmid pHBV-3 into HepG2 cells increased CAT activity of pSV2-CAT, while the delta X mutation clearly showed no stimulation of activity. On the other hand, in the HuH-7 cells, pHBV-3 exhibited no such stimulation. The trans-acting function of the X gene product in two different hepatoma cells was clearly shown to differ. Furthermore, transfection of X gene expression plasmid pKSV-HBx into mouse NIH3T3 cells increased the CAT activity of pSV2-CAT. Trans-activation was still detectable even following deletion of enhancer sequences in the pSV2CAT. The oncogenic potential of HBV is discussed with special attention to the X gene product, which may be able to activate a cellular transcription factor at the viral and cellular promotor sequences in the cells.