Hepatitis B virus (HBV) X protein (HBx) is considered to play a role in the development of hepatocellular carcinoma (HCC) during HBV infection. HCC was shown to be more prevalent in men than in women. Estrogen, which exerts its biological function through estrogen receptor (ER), can inhibit HBV replication. ERDelta5, an ERalpha variant lacking exon 5, was found to be preferentially expressed in patients with HCC compared with patients with normal livers. Here, we report the biological role of ERDelta5 and a novel link between HBx and ERalpha signaling in hepatoma cells. ERDelta5 interacts with ERalpha in vitro and in vivo and functions as a dominant negative receptor. Both ERalpha and ERDelta5 associate with HBx. HBx decreases ERalpha-dependent transcriptional activity, and HBx and ERDelta5 have additive effect on suppression of ERalpha transactivation. The HBx deletion mutant that lacks the ERalpha-binding site abolishes the HBx repression of ERalpha. HBx, ERalpha and histone deacetylase 1 (HDAC1) form a ternary complex. Trichostatin A, a specific inhibitor of HDAC enzyme, can restore the transcriptional activity of ERalpha inhibited by HBx. Our data suggest that HBx and ERDelta5 may play a negative role in ERalpha signaling and that ERalpha agonists may be developed for HCC therapy.