Hepatitis B virus X (HBX) is essential for the productive infection of hepatitis B virus (HBV) in vivo and has a pleiotropic effect on host cells. We have previously demonstrated that the proteasome complex is a cellular target of HBX, that HBX alters the proteolytic activity of proteasome in vitro, and that inhibition of proteasome leads to enhanced viral replication, suggesting that HBX and proteasome interaction plays a crucial role in the life cycle and pathogenesis of HBV. In the present study, we tested the effect of HBX on the proteasome activities in vivo in a transgenic mouse model in which HBX expression is developmentally regulated by the mouse major urinary promoter in the liver. In addition, microarray analysis was performed to examine the effect of HBX expression on the global gene expression profile of the liver. The results showed that the peptidase activities of the proteasome were reduced in the HBX transgenic mouse liver, whereas the activity of another cellular protease was elevated, suggesting a compensatory mechanism in protein degradation. In the microarray analysis, diverse genes were altered in the HBX mouse livers and the number of genes with significant changes increased progressively with age. Functional clustering showed that a number of genes involved in transcription and cell growth were significantly affected in the HBX mice, possibly accounting for the observed pleiotropic effect of HBX. In particular, insulin-like growth factor-binding protein 1 was down-regulated in the HBX mouse liver. The down-regulation was similarly observed during acute woodchuck hepatitis virus infection. Other changes including up-regulation of proteolysis-related genes may also contribute to the profound alterations of liver functions in HBV infection.