The oncogenic hepatitis B virus X protein (HBx) and cyclooxygenase (COX)-2 are highly co-expressed in chronic hepatitis, cirrhosis and well-differentiated hepatocellular carcinoma (HCC). Although HBx is shown to activate COX-2, the functional consequences of this interaction in hepatocarcinogenesis remain unknown. Using an engineered hepatoma cell system in which the expression of wild-type p53 can be chemically modulated, we show here that COX-2 mediates HBx actions in opposing p53. Enforced expression of HBx sequestrates p53 in the cytoplasm and significantly abolishes p53-induced apoptosis. The anti-apoptotic Mcl-1 protein is suppressed by p53 but reactivated by HBx. The abrogation of apoptosis is completely reversed by specific COX-2 inhibition, suggesting that HBx blocks p53-induced apoptosis via activation of COX-2/PGE(2) pathway. We further show that COX-2 inhibition blocks HBx reactivation of Mcl-1, linking this protein to the anti-apoptotic function of COX-2. These results demonstrate that COX-2 is an important survival factor mediating the oncogenic actions of HBx. Over-expression of HBx and COX-2 may provide a selective clonal advantage for preneoplastic or neoplastic hepatocytes and contribute to the initiation and progression of HCC.